Cogent Communications (NASDAQ: CCOI) and OI (NYSE:OIBR) are both telecommunications services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitability, dividends, institutional ownership, risk and earnings.

Earnings and Valuation

This table compares Cogent Communications and OI’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cogent Communications $446.90 million 4.82 $14.92 million $0.35 133.86
OI N/A N/A N/A ($3.28) -2.07

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

Volatility & Risk

Cogent Communications has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500. Comparatively, OI has a beta of 2.22, suggesting that its share price is 122% more volatile than the S&P 500.

Institutional and Insider Ownership

95.6% of Cogent Communications shares are held by institutional investors. 9.5% of Cogent Communications shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Cogent Communications and OI, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cogent Communications 5 6 4 0 1.93
OI 0 0 0 0 N/A

Cogent Communications presently has a consensus target price of $42.67, suggesting a potential downside of 8.93%. Given Cogent Communications’ higher probable upside, research analysts clearly believe Cogent Communications is more favorable than OI.

Dividends

Cogent Communications pays an annual dividend of $1.92 per share and has a dividend yield of 4.1%. OI does not pay a dividend. Cogent Communications pays out 548.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Cogent Communications and OI’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cogent Communications 3.37% -23.86% 2.18%
OI -24.34% -49.64% -7.06%

Summary

Cogent Communications beats OI on 10 of the 12 factors compared between the two stocks.

About Cogent Communications

Cogent Communications Holdings, Inc. is a facilities-based provider of Internet access and Internet Protocol (IP), communications services. The Company’s network is specifically designed and optimized to transmit data using IP. The Company delivers its services primarily to small and medium-sized businesses, communications service providers and other bandwidth-intensive organizations in North America, Europe and in Japan. The Company offers on-net services in over 175 metropolitan markets. The Company serves 1,990 on-net buildings. The Company’s on-net service in North America is its Fast Ethernet service, which provides Internet access at 100 megabits per second. It also offers Internet access services at higher speeds of up to ten Gigabits per second. These services are generally used by customers that have businesses, such as Web hosting, that are Internet-based.

About OI

Oi S.A. is an integrated telecommunications service provider in Brazil. The Company is a switched fixed-line telephony services (STFC) concessionaire. It is engaged in the provision of STFC as a local and intraregional long-distance carrier. Its segments include Residential Services, Personal Mobility, and SMEs/Corporate. It offers a range of integrated telecommunications services that include fixed and mobile, broadband, pay television (TV), data transmission and Internet provider services. The Company’s Residential Services segment is focused on the sale of fixed telephony services, including voice services, data communication services (broadband), and pay TV. The Personal Mobility segment is focused on the sale of mobile telephony services to subscription and prepaid customers, and mobile broadband customer. The SMEs/Corporate segment includes corporate solutions offered to its small, medium-sized, and large corporate customers.

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