PrimeEnergy (NASDAQ:PNRG) & Kosmos Energy (NYSE:KOS) Head to Head Review

PrimeEnergy (NASDAQ:PNRG) 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 analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.

Institutional and Insider Ownership

95.3% of Kosmos Energy shares are owned by institutional investors. 65.3% of PrimeEnergy shares are owned by insiders. Comparatively, 1.9% of Kosmos Energy shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
PrimeEnergy	13.87%	11.47%	7.67%
Kosmos Energy	-33.98%	-17.73%	-2.49%

Earnings and Valuation

This table compares PrimeEnergy 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
PrimeEnergy	$189.05 million	1.73	$26.31 million	$10.38	19.92
Kosmos Energy	$1.29 billion	1.23	-$699.79 million	($1.19)	-2.24

PrimeEnergy has higher earnings, but lower revenue than Kosmos Energy. Kosmos Energy is trading at a lower price-to-earnings ratio than PrimeEnergy, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PrimeEnergy	0	2	0	0	2.00
Kosmos Energy	4	3	2	0	1.78

Kosmos Energy has a consensus target price of $2.53, indicating a potential downside of 5.30%. Given Kosmos Energy’s higher possible upside, analysts plainly believe Kosmos Energy is more favorable than PrimeEnergy.

Risk and Volatility

PrimeEnergy has a beta of -0.24, suggesting that its stock price is 124% less volatile than the S&P 500. Comparatively, Kosmos Energy has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500.

Summary

PrimeEnergy beats Kosmos Energy on 9 of the 14 factors compared between the two stocks.

About PrimeEnergy

PrimeEnergy Resources Corporation, through its subsidiaries, engages in acquisition, development, and production of oil and natural gas properties in the United States. The company owns leasehold, mineral, and royalty interests in producing and non-producing oil and gas properties; and operates approximately 534 active wells and owns non-operating interests and royalties in 952 additional wells. It also acquires producing oil and gas properties through joint ventures with industry partners; and provides contract services to third parties, including well-servicing support, site-preparation, and construction services for oil and gas drilling and reworking operations. The company was formerly known as PrimeEnergy Corporation and changed its name to PrimeEnergy Resources Corporation in December 2018. PrimeEnergy Resources Corporation was incorporated in 1973 and is headquartered in Houston, Texas.

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.