Head-To-Head Analysis: Gevo (NASDAQ:GEVO) and Meren Energy (OTCMKTS:AOIFF)

Meren Energy (OTCMKTS:AOIFF) and Gevo (NASDAQ:GEVO) are both small-cap energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, valuation and institutional ownership.

Insider & Institutional Ownership

35.2% of Gevo shares are held by institutional investors. 1.0% of Meren Energy shares are held by insiders. Comparatively, 6.8% of Gevo shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

Meren Energy has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500. Comparatively, Gevo has a beta of 1.49, indicating that its share price is 49% more volatile than the S&P 500.

Profitability

This table compares Meren Energy and Gevo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Meren Energy	N/A	3.52%	1.68%
Gevo	-37.33%	-9.49%	-6.82%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Meren Energy and Gevo, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Meren Energy	0	0	0	0	0.00
Gevo	1	2	2	0	2.20

Gevo has a consensus price target of $6.42, suggesting a potential upside of 273.06%. Given Gevo’s stronger consensus rating and higher possible upside, analysts plainly believe Gevo is more favorable than Meren Energy.

Earnings & Valuation

This table compares Meren Energy and Gevo”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Meren Energy	N/A	N/A	-$279.10 million	($0.52)	-3.05
Gevo	$120.93 million	3.45	-$78.64 million	($0.20)	-8.60

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

Summary

Gevo beats Meren Energy on 9 of the 13 factors compared between the two stocks.

About Meren Energy

Africa Oil Corp., together with its subsidiaries, operates as an oil and gas exploration and production company in Kenya, Nigeria, and South Africa. The company holds interests in producing and development assets in deep-water Nigeria, and development assets in Kenya. It also has a portfolio of exploration and appraisal assets in Namibia, Nigeria, South Africa, and Kenya, as well as Guyana and Senegal Guinea Bissau Joint Development Zone. The company was formerly known as Canmex Minerals Corporation and changed its name to Africa Oil Corp. in August 2007. Africa Oil Corp. was incorporated in 1983 and is headquartered in Vancouver, Canada.

About Gevo

Gevo, Inc. operates as a carbon abatement company. It operates through three segments: Gevo, Agri-Energy, and Renewable Natural Gas. The company focuses on transforming renewable energy into energy-dense liquid hydrocarbons that can be used as renewable fuels. It offers renewable gasoline and diesel, isobutanol, sustainable aviation fuel, renewable natural gas, isobutylene, ethanol, and animal feed and protein. The company was formerly known as Methanotech, Inc. and changed its name to Gevo, Inc. in March 2006. Gevo, Inc. was incorporated in 2005 and is headquartered in Englewood, Colorado.