Kosmos Energy (NYSE:KOS) and Torchlight Energy Resources (NASDAQ:TRCH) are both small-cap oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.
Volatility and Risk
Kosmos Energy has a beta of 3.77, suggesting that its share price is 277% more volatile than the S&P 500. Comparatively, Torchlight Energy Resources has a beta of 2.6, suggesting that its share price is 160% more volatile than the S&P 500.
Analyst Ratings
This is a summary of recent ratings and recommmendations for Kosmos Energy and Torchlight Energy Resources, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Kosmos Energy | 0 | 7 | 3 | 0 | 2.30 |
| Torchlight Energy Resources | 0 | 1 | 0 | 0 | 2.00 |
Kosmos Energy presently has a consensus price target of $2.3986, indicating a potential downside of 22.12%. Given Kosmos Energy's stronger consensus rating and higher probable upside, equities analysts plainly believe Kosmos Energy is more favorable than Torchlight Energy Resources.
Valuation and Earnings
This table compares Kosmos Energy and Torchlight Energy Resources' top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Kosmos Energy | $1.51 billion | 0.83 | $-55,780,000.00 | ($0.05) | -61.60 |
| Torchlight Energy Resources | $750,000.00 | 471.56 | $-9,840,000.00 | N/A | N/A |
Torchlight Energy Resources has lower revenue, but higher earnings than Kosmos Energy.
Profitability
This table compares Kosmos Energy and Torchlight Energy Resources' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Kosmos Energy | -45.99% | -41.86% | -5.97% |
| Torchlight Energy Resources | -4,346.59% | -77.14% | -32.40% |
Institutional and Insider Ownership
80.4% of Kosmos Energy shares are held by institutional investors. Comparatively, 6.3% of Torchlight Energy Resources shares are held by institutional investors. 1.5% of Kosmos Energy shares are held by company insiders. Comparatively, 17.5% of Torchlight Energy Resources shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Summary
Kosmos Energy beats Torchlight Energy Resources on 10 of the 13 factors compared between the two stocks.
