Star Group (NYSE:SGU – Get Free Report) and Kosmos Energy (NYSE:KOS – Get Free Report) are both small-cap energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, risk, profitability, institutional ownership, earnings and dividends.
Institutional & Insider Ownership
40.4% of Star Group shares are held by institutional investors. Comparatively, 95.3% of Kosmos Energy shares are held by institutional investors. 20.4% of Star Group shares are held by company insiders. Comparatively, 1.9% of Kosmos Energy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Dividends
Star Group pays an annual dividend of $0.79 per share and has a dividend yield of 6.0%. Kosmos Energy pays an annual dividend of $0.18 per share and has a dividend yield of 6.7%. Star Group pays out 42.2% of its earnings in the form of a dividend. Kosmos Energy pays out -15.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Star Group has raised its dividend for 13 consecutive years. Kosmos Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk and Volatility
Analyst Recommendations
This is a summary of recent recommendations for Star Group and Kosmos Energy, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Star Group | 0 | 1 | 0 | 0 | 2.00 |
| Kosmos Energy | 4 | 3 | 2 | 0 | 1.78 |
Kosmos Energy has a consensus price target of $2.53, indicating a potential downside of 7.04%. Given Kosmos Energy’s higher probable upside, analysts clearly believe Kosmos Energy is more favorable than Star Group.
Profitability
This table compares Star Group and Kosmos Energy’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Star Group | 4.57% | 24.43% | 8.39% |
| Kosmos Energy | -33.98% | -17.73% | -2.49% |
Earnings and Valuation
This table compares Star Group 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 | |
| Star Group | $1.78 billion | 0.24 | $73.50 million | $1.87 | 6.99 |
| Kosmos Energy | $1.58 billion | 1.02 | -$699.79 million | ($1.19) | -2.29 |
Star Group has higher revenue and earnings than Kosmos Energy. Kosmos Energy is trading at a lower price-to-earnings ratio than Star Group, indicating that it is currently the more affordable of the two stocks.
Summary
Star Group beats Kosmos Energy on 10 of the 17 factors compared between the two stocks.
About Star Group
Star Group, L.P., together with its subsidiaries, provides home heating oil and propane products and services to residential and commercial customers in the United States. It offers gasoline and diesel fuel; and installs, maintain, and repairs heating and air conditioning equipment. As of September 30, 2023, the company served approximately 402,200 full service residential and commercial home heating oil and propane customers and 52,400 customers on a delivery only basis. It also sells gasoline and diesel fuel to approximately 26,600 customers. The company was formerly known as Star Gas Partners, L.P. and changed its name to Star Group, L.P. in October 2017. Star Group, L.P. was incorporated in 1995 and is based in Stamford, Connecticut.
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.
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