Critical Contrast: Cogent Communications (CCOI) & Its Rivals

Cogent Communications (NASDAQ: CCOI) is one of 48 public companies in the “Integrated Telecommunications Services” industry, but how does it contrast to its rivals? We will compare Cogent Communications to related businesses based on the strength of its analyst recommendations, dividends, institutional ownership, risk, profitability, earnings and valuation.

Profitability

This table compares Cogent Communications and its rivals’ 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%
Cogent Communications Competitors 2.27% -0.83% 2.01%

Analyst Ratings

This is a summary of current ratings for Cogent Communications and its rivals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cogent Communications 5 6 4 0 1.93
Cogent Communications Competitors 592 1698 2014 66 2.36

Cogent Communications currently has a consensus target price of $42.67, indicating a potential downside of 8.93%. As a group, “Integrated Telecommunications Services” companies have a potential upside of 62.60%. Given Cogent Communications’ rivals stronger consensus rating and higher probable upside, analysts plainly believe Cogent Communications has less favorable growth aspects than its rivals.

Valuation & Earnings

This table compares Cogent Communications and its rivals gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Cogent Communications $446.90 million $14.92 million 130.14
Cogent Communications Competitors $16.60 billion $1.32 billion 14.63

Cogent Communications’ rivals have higher revenue and earnings than Cogent Communications. Cogent Communications is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Risk and Volatility

Cogent Communications has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500. Comparatively, Cogent Communications’ rivals have a beta of 0.96, indicating that their average stock price is 4% less volatile than the S&P 500.

Dividends

Cogent Communications pays an annual dividend of $1.92 per share and has a dividend yield of 4.1%. Cogent Communications pays out 533.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Integrated Telecommunications Services” companies pay a dividend yield of 4.2% and pay out 595.7% of their earnings in the form of a dividend.

Institutional and Insider Ownership

95.6% of Cogent Communications shares are held by institutional investors. Comparatively, 60.1% of shares of all “Integrated Telecommunications Services” companies are held by institutional investors. 9.5% of Cogent Communications shares are held by insiders. Comparatively, 5.0% of shares of all “Integrated Telecommunications Services” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Cogent Communications rivals beat Cogent Communications on 9 of the 15 factors compared.

Cogent Communications Company Profile

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.

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