Kosmos Energy (NYSE: KOS) and Pacific Coast Oil Trust (NYSE:ROYT) are both oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, earnings, analyst recommendations, risk and profitability.
Pacific Coast Oil Trust pays an annual dividend of $0.33 per share and has a dividend yield of 13.2%. Kosmos Energy does not pay a dividend. Pacific Coast Oil Trust pays out 412.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This table compares Kosmos Energy and Pacific Coast Oil Trust’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Kosmos Energy||$385.36 million||6.86||-$283.78 million||($0.40)||-16.97|
|Pacific Coast Oil Trust||$32.19 million||3.00||$220,000.00||$0.08||31.25|
Pacific Coast Oil Trust has lower revenue, but higher earnings than Kosmos Energy. Kosmos Energy is trading at a lower price-to-earnings ratio than Pacific Coast Oil Trust, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and target prices for Kosmos Energy and Pacific Coast Oil Trust, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Pacific Coast Oil Trust||0||1||0||0||2.00|
Kosmos Energy presently has a consensus target price of $9.45, suggesting a potential upside of 39.24%. Pacific Coast Oil Trust has a consensus target price of $1.50, suggesting a potential downside of 40.00%. Given Kosmos Energy’s stronger consensus rating and higher probable upside, research analysts plainly believe Kosmos Energy is more favorable than Pacific Coast Oil Trust.
Institutional & Insider Ownership
16.4% of Pacific Coast Oil Trust shares are held by institutional investors. 3.8% of Kosmos Energy shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Risk & Volatility
Kosmos Energy has a beta of 1.57, meaning that its stock price is 57% more volatile than the S&P 500. Comparatively, Pacific Coast Oil Trust has a beta of 2.17, meaning that its stock price is 117% more volatile than the S&P 500.
This table compares Kosmos Energy and Pacific Coast Oil Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Pacific Coast Oil Trust||6.02%||1.44%||1.43%|
Pacific Coast Oil Trust beats Kosmos Energy on 9 of the 16 factors compared between the two stocks.
Kosmos Energy Company Profile
Kosmos Energy Ltd. (Kosmos) is an independent oil and gas exploration and production company. The Company is focused on the emerging areas along the Atlantic Margins. Its assets include existing production and development projects offshore Ghana, discoveries and further exploration potential offshore Mauritania and Senegal, as well as exploration licenses with hydrocarbon potential offshore Sao Tome and Principe, Suriname, Morocco and Western Sahara. The Company has operations in Africa and South America. The West Cape Three Points (WCTP) Block and Deepwater Tano (DT) Block are located within the Tano Basin, offshore Ghana. The Tano Basin represents the eastern extension of the Deep Ivorian Basin, which resulted from the development of an extensional sedimentary basin caused by tensional forces associated with opening of the Atlantic Ocean, as South America separated from Africa in the Mid-Cretaceous period.
Pacific Coast Oil Trust Company Profile
Pacific Coast Oil Trust is a statutory trust formed by Pacific Coast Energy Company LP (PCEC). The Trust is engaged in acquiring and holding net profits and royalty interests in certain oil and natural gas properties located in California for the benefit of the Trust unitholders. The Underlying Properties consist of producing and non-producing interests in oil units, wells and lands located onshore in California in the Santa Maria Basin, which contains PCEC’s Orcutt properties, and the Los Angeles Basin, which contains PCEC’s West Pico, East Coyote and Sawtelle properties. The Underlying Properties consist of the proved developed reserves referred to as the Developed Properties and all other development potential on the Underlying Properties, which are referred to as the Remaining Properties. Production from the Developed Properties attributable to the Trust is produced from wells that, because they have already been drilled and require limited additional capital expenditures.
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