Analyzing FAR (OTCMKTS:FARYF) and Kosmos Energy (NYSE:KOS)

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

Insider & Institutional Ownership

95.3% of Kosmos Energy shares are owned by institutional investors. 1.0% of FAR shares are owned by insiders. Comparatively, 2.0% of Kosmos Energy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk and Volatility

FAR has a beta of -0.16, suggesting that its stock price is 116% less volatile than the S&P 500. Comparatively, Kosmos Energy has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for FAR and Kosmos Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FAR	0	0	0	0	0.00
Kosmos Energy	2	4	2	0	2.00

Kosmos Energy has a consensus target price of $2.29, suggesting a potential upside of 150.46%. Given Kosmos Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Kosmos Energy is more favorable than FAR.

Earnings and Valuation

This table compares FAR and Kosmos Energy”s top-line revenue, earnings per share 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	0.26	$189.85 million	($0.68)	-1.35

Kosmos Energy has higher revenue and earnings than FAR.

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%

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.