Head-To-Head Review: Navigator (NYSE:NVGS) versus Kosmos Energy (NYSE:KOS)

Kosmos Energy (NYSE:KOS) and Navigator (NYSE:NVGS) are both small-cap energy companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, valuation, dividends, analyst recommendations and risk.

Earnings and Valuation

This table compares Kosmos Energy and Navigator”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kosmos Energy	$1.58 billion	1.02	-$699.79 million	($1.19)	-2.29
Navigator	$586.96 million	2.20	$100.12 million	$2.17	9.77

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

Institutional & Insider Ownership

95.3% of Kosmos Energy shares are held by institutional investors. Comparatively, 19.0% of Navigator shares are held by institutional investors. 1.9% of Kosmos Energy shares are held by company insiders. Comparatively, 0.4% of Navigator shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Kosmos Energy	-33.98%	-17.73%	-2.49%
Navigator	22.80%	10.45%	5.73%

Risk and Volatility

Kosmos Energy has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500. Comparatively, Navigator has a beta of 0.48, meaning that its share price is 52% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Kosmos Energy and Navigator, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kosmos Energy	4	3	2	0	1.78
Navigator	0	1	4	0	2.80

Kosmos Energy currently has a consensus price target of $2.53, suggesting a potential downside of 7.04%. Navigator has a consensus price target of $23.00, suggesting a potential upside of 8.51%. Given Navigator’s stronger consensus rating and higher possible upside, analysts plainly believe Navigator is more favorable than Kosmos Energy.

Dividends

Kosmos Energy pays an annual dividend of $0.18 per share and has a dividend yield of 6.7%. Navigator pays an annual dividend of $0.28 per share and has a dividend yield of 1.3%. Kosmos Energy pays out -15.2% of its earnings in the form of a dividend. Navigator pays out 12.9% 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. Navigator has increased its dividend for 1 consecutive years. Kosmos Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Navigator beats Kosmos Energy on 11 of the 17 factors compared between the two stocks.

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.

About Navigator

Navigator Holdings Ltd. engages in owning and operating a fleet of liquefied gas carriers worldwide. It provides international and regional seaborne transportation services of petrochemical gases, liquefied petroleum gases, and ammonia for energy companies, industrial users, and commodity traders. The company also offers ship shore infrastructure and consultancy services. It operates a fleet of 56 semi- or fully-refrigerated liquefied gas carriers. The company was formerly known as Isle of Man public limited company and changed its name to Navigator Holdings Ltd. in 2006. Navigator Holdings Ltd. was incorporated in 1997 and is based in London, the United Kingdom.