Kosmos Energy (NYSE:KOS) versus FAR (OTCMKTS:FARYF) Critical Analysis

FAR (OTCMKTS:FARYF) and Kosmos Energy (NYSE:KOS) are both small-cap energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Profitability

This table compares FAR and Kosmos Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FAR	N/A	N/A	N/A
Kosmos Energy	-23.64%	-26.28%	-5.31%

Volatility and Risk

FAR has a beta of -0.15, suggesting that its share price is 115% less volatile than the S&P 500. Comparatively, Kosmos Energy has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500.

Valuation & Earnings

This table compares FAR and Kosmos Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FAR	N/A	N/A	N/A	N/A	N/A
Kosmos Energy	$1.68 billion	0.48	$189.85 million	($0.68)	-2.48

Kosmos Energy has higher revenue and earnings than FAR.

Analyst Recommendations

This is a summary of current ratings and price targets for FAR and Kosmos Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FAR	0	0	0	0	0.00
Kosmos Energy	2	5	2	0	2.00

Kosmos Energy has a consensus price target of $2.08, indicating a potential upside of 23.36%. Given Kosmos Energy’s stronger consensus rating and higher possible upside, analysts clearly believe Kosmos Energy is more favorable than FAR.

Institutional & Insider Ownership

95.3% of Kosmos Energy shares are held by institutional investors. 1.0% of FAR shares are held by company insiders. Comparatively, 2.0% of Kosmos Energy shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Kosmos Energy beats FAR on 7 of the 10 factors compared between the two stocks.

About FAR

FAR Limited operates as an oil and gas exploration and development company with primary assets in West Africa and Australia. The company holds a portfolio of exploration licenses in the Gambia and Guinea-Bissau. It also holds a petroleum exploration permit in Western Australia. The company was formerly known as First Australian Resources NL and changed its name to FAR Limited in 2010. FAR Limited was incorporated in 1984 and is based in Melbourne, Australia.

About Kosmos Energy

Kosmos Energy Ltd., together with its subsidiaries, engages in the exploration, development, and production of oil and gas along the Atlantic Margins in the United States. The company’s primary assets include production projects located in offshore Ghana, Equatorial Guinea, and the U.S. Gulf of Mexico, as well as gas projects located in offshore Mauritania and Senegal. It undertakes a proven basin exploration program in Equatorial Guinea and the U.S. Gulf of Mexico. Kosmos Energy Ltd. was founded in 2003 and is headquartered in Dallas, Texas.