Analyzing Zion Oil & Gas (OTCMKTS:ZNOG) & U.S. Energy (NASDAQ:USEG)

Zion Oil & Gas (OTCMKTS:ZNOG) and U.S. Energy (NASDAQ:USEG) are both small-cap energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, analyst recommendations, institutional ownership, risk and valuation.

Valuation & Earnings

This table compares Zion Oil & Gas and U.S. Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zion Oil & Gas	N/A	N/A	-$7.34 million	($1.77)	-0.23
U.S. Energy	$20.62 million	2.48	-$25.78 million	($0.83)	-1.72

Zion Oil & Gas has higher earnings, but lower revenue than U.S. Energy. U.S. Energy is trading at a lower price-to-earnings ratio than Zion Oil & Gas, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Zion Oil & Gas has a beta of 0.38, suggesting that its share price is 62% less volatile than the S&P 500. Comparatively, U.S. Energy has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500.

Profitability

This table compares Zion Oil & Gas and U.S. Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zion Oil & Gas	N/A	-19.89%	-18.12%
U.S. Energy	-240.93%	-70.53%	-38.35%

Insider & Institutional Ownership

7.9% of Zion Oil & Gas shares are owned by institutional investors. Comparatively, 3.0% of U.S. Energy shares are owned by institutional investors. 3.0% of Zion Oil & Gas shares are owned by company insiders. Comparatively, 61.0% of U.S. Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and target prices for Zion Oil & Gas and U.S. Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zion Oil & Gas	0	0	0	0	0.00
U.S. Energy	1	0	1	0	2.00

U.S. Energy has a consensus target price of $3.50, suggesting a potential upside of 144.76%. Given U.S. Energy’s stronger consensus rating and higher possible upside, analysts plainly believe U.S. Energy is more favorable than Zion Oil & Gas.

Summary

U.S. Energy beats Zion Oil & Gas on 7 of the 13 factors compared between the two stocks.

About Zion Oil & Gas

Zion Oil & Gas, Inc., together with its subsidiaries, operates as an oil and gas exploration company in Israel. It holds a petroleum exploration license onshore Israel, the New Megiddo License 434 comprising an area of approximately 75,000 acres. The company was incorporated in 2000 and is headquartered in Dallas, Texas.

About U.S. Energy

U.S. Energy Corp., an independent energy company, focuses on the acquisition, exploration, and development of oil and natural gas properties in the United States. It holds interests in various oil and gas properties located in the Rockies region, including Montana, Wyoming, and North Dakota; the Mid-Continent region comprising Oklahoma, Kansas, and North and East Texas; West Texas; South Texas; and the Gulf Coast regions. The company was incorporated in 1966 and is headquartered in Houston, Texas.