Cogent Communications (NASDAQ: CCOI) and Black Box (NASDAQ:BBOX) are both computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, risk, analyst recommendations, valuation, institutional ownership and profitability.

Valuation & Earnings

This table compares Cogent Communications and Black Box’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cogent Communications $446.90 million 4.76 $14.92 million $0.36 128.47
Black Box $855.70 million 0.06 -$7.05 million ($1.43) -2.20

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

Risk & Volatility

Cogent Communications has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500. Comparatively, Black Box has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Cogent Communications and Black Box, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cogent Communications 5 6 4 0 1.93
Black Box 0 1 0 0 2.00

Cogent Communications currently has a consensus target price of $42.67, indicating a potential downside of 7.75%. Black Box has a consensus target price of $10.00, indicating a potential upside of 217.46%. Given Black Box’s stronger consensus rating and higher probable upside, analysts clearly believe Black Box is more favorable than Cogent Communications.

Institutional & Insider Ownership

95.6% of Cogent Communications shares are owned by institutional investors. Comparatively, 73.9% of Black Box shares are owned by institutional investors. 9.5% of Cogent Communications shares are owned by insiders. Comparatively, 3.7% of Black Box shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Cogent Communications and Black Box’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%
Black Box -2.69% -2.71% -0.86%

Dividends

Cogent Communications pays an annual dividend of $1.92 per share and has a dividend yield of 4.2%. Black Box pays an annual dividend of $0.36 per share and has a dividend yield of 11.4%. 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. Black Box pays out -25.2% of its earnings in the form of a dividend. Black Box is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Cogent Communications beats Black Box on 8 of the 15 factors compared between the two stocks.

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.

Black Box Company Profile

Black Box Corporation is a technology solutions provider. The Company is engaged in designing, building, managing and securing the information technology (IT) infrastructure. Offerings under the Company’s Products platform include IT infrastructure, specialty networking, multimedia and keyboard/video/mouse (KVM) switching. Offerings under its Services platform include unified communications, data infrastructure and managed services. It conducts business globally and manages its business on a geographic-service type basis consisting of four segments: North America Products, North America Services, International Products and International Services. The offerings of its Products platform are distributed through value-added resellers, direct marketing manufacturers, mass merchandisers, Web retailers and others. The offerings of its Services platform are distributed through value-added resellers, manufacturers and large system integrators, among others.

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