Head-To-Head Comparison: Cogent Communications (CCOI) versus Its Competitors

Cogent Communications (NASDAQ: CCOI) is one of 46 public companies in the “Integrated Telecommunications Services” industry, but how does it contrast to its rivals? We will compare Cogent Communications to similar businesses based on the strength of its institutional ownership, profitability, dividends, analyst recommendations, valuation, risk and earnings.

Volatility and Risk

Cogent Communications has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500. Comparatively, Cogent Communications’ rivals have a beta of 0.93, meaning that their average share price is 7% less volatile than the S&P 500.

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 2.92% -0.38% 2.14%

Valuation and Earnings

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

Gross Revenue Net Income Price/Earnings Ratio
Cogent Communications $446.90 million $14.92 million 130.42
Cogent Communications Competitors $15.94 billion $1.27 billion -38.19

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.

Analyst Ratings

This is a summary of current ratings and recommmendations for Cogent Communications and its rivals, as reported 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 492 1512 1672 57 2.35

Cogent Communications currently has a consensus price target of $42.67, suggesting a potential downside of 9.12%. As a group, “Integrated Telecommunications Services” companies have a potential upside of 65.98%. Given Cogent Communications’ rivals stronger consensus rating and higher possible upside, analysts clearly believe Cogent Communications has less favorable growth aspects than its rivals.

Institutional and Insider Ownership

95.6% of Cogent Communications shares are owned by institutional investors. Comparatively, 60.1% of shares of all “Integrated Telecommunications Services” companies are owned by institutional investors. 9.5% of Cogent Communications shares are owned by insiders. Comparatively, 5.0% of shares of all “Integrated Telecommunications Services” companies are owned 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.

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 4.3% and pay out -552.9% of their earnings in the form of a dividend. Cogent Communications lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Summary

Cogent Communications rivals beat Cogent Communications on 10 of the 15 factors compared.

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.

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