Critical Survey: Pharos Energy (OTCMKTS:SOCLF) versus Kosmos Energy (NYSE:KOS)

Pharos Energy (OTCMKTS:SOCLF) 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 risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.

Valuation & Earnings

This table compares Pharos Energy and Kosmos Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pharos Energy	$136.00 million	0.90	N/A	N/A	N/A
Kosmos Energy	$1.39 billion	0.53	$189.85 million	($0.68)	-2.26

Kosmos Energy has higher revenue and earnings than Pharos Energy.

Profitability

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

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

Institutional and Insider Ownership

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

Risk & Volatility

Pharos Energy has a beta of 0.15, suggesting that its stock price is 85% less volatile than the S&P 500. Comparatively, Kosmos Energy has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500.

Analyst Recommendations

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

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

Kosmos Energy has a consensus target price of $2.08, suggesting a potential upside of 35.01%. Given Kosmos Energy’s stronger consensus rating and higher possible upside, analysts clearly believe Kosmos Energy is more favorable than Pharos Energy.

Summary

Kosmos Energy beats Pharos Energy on 7 of the 11 factors compared between the two stocks.

About Pharos Energy

Pharos Energy plc, an independent energy company, engages in the exploration, development, and production of oil and gas properties in Vietnam, Egypt, and China. The company was formerly known as SOCO International plc and changed its name to Pharos Energy plc in October 2019. Pharos Energy plc was incorporated in 1997 and is headquartered in London, the United Kingdom.

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.