Critical Comparison: Africa Oil (OTCMKTS:AOIFF) vs. Gulf Keystone Petroleum (OTCMKTS:GUKYF)

Africa Oil (OTCMKTS:AOIFF) and Gulf Keystone Petroleum (OTCMKTS:GUKYF) are both oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, profitability, analyst recommendations and valuation.

Profitability

This table compares Africa Oil and Gulf Keystone Petroleum’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Africa Oil	N/A	16.19%	15.10%
Gulf Keystone Petroleum	N/A	N/A	N/A

Insider and Institutional Ownership

12.6% of Gulf Keystone Petroleum shares are held by institutional investors. 1.0% of Africa Oil shares are held 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.

Analyst Ratings

This is a breakdown of current recommendations for Africa Oil and Gulf Keystone Petroleum, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Africa Oil	0	0	1	0	3.00
Gulf Keystone Petroleum	0	1	0	0	2.00

Valuation & Earnings

This table compares Africa Oil and Gulf Keystone Petroleum’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Africa Oil	N/A	N/A	$87.10 million	$0.18	9.92
Gulf Keystone Petroleum	N/A	N/A	N/A	($0.04)	-34.87

Gulf Keystone Petroleum is trading at a lower price-to-earnings ratio than Africa Oil, indicating that it is currently the more affordable of the two stocks.

Summary

Africa Oil beats Gulf Keystone Petroleum on 7 of the 8 factors compared between the two stocks.

About Africa Oil

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 Gulf Keystone Petroleum

Gulf Keystone Petroleum Limited engages in oil and gas exploration, development, and production in the Kurdistan Region of Iraq. The company operates Shaikan field that covers an area of approximately 280 square kilometers, which is located north-west of Erbil. It also provides management, support, geological, geophysical, and engineering services. The company was incorporated in 2001 and is based in Hamilton, Bermuda.