Cogent Communications (NASDAQ:CCOI) and Telecom Italia (OTCMKTS:TIIAY) are both mid-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, analyst recommendations and profitability.
This table compares Cogent Communications and Telecom Italia’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of recent recommendations for Cogent Communications and Telecom Italia, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Cogent Communications currently has a consensus price target of $81.57, indicating a potential upside of 22.55%. Given Cogent Communications’ stronger consensus rating and higher probable upside, analysts clearly believe Cogent Communications is more favorable than Telecom Italia.
Cogent Communications pays an annual dividend of $2.82 per share and has a dividend yield of 4.2%. Telecom Italia pays an annual dividend of $0.31 per share and has a dividend yield of 7.0%. Cogent Communications pays out 371.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Telecom Italia pays out 56.4% of its earnings in the form of a dividend. Cogent Communications has raised its dividend for 7 consecutive years. Telecom Italia is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk and Volatility
Cogent Communications has a beta of 0.05, indicating that its share price is 95% less volatile than the S&P 500. Comparatively, Telecom Italia has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500.
Valuation & Earnings
This table compares Cogent Communications and Telecom Italia’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Cogent Communications||$546.16 million||5.76||$37.52 million||$0.76||87.58|
|Telecom Italia||$20.13 billion||0.46||$1.03 billion||$0.55||8.00|
Telecom Italia has higher revenue and earnings than Cogent Communications. Telecom Italia is trading at a lower price-to-earnings ratio than Cogent Communications, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
96.3% of Cogent Communications shares are owned by institutional investors. Comparatively, 0.1% of Telecom Italia shares are owned by institutional investors. 10.7% of Cogent Communications shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Cogent Communications beats Telecom Italia on 11 of the 17 factors compared between the two stocks.
Cogent Communications Company Profile
Cogent Communications Holdings, Inc., through its subsidiaries, provides high-speed Internet access, private network, and data center colocation space services primarily to small and medium-sized businesses, communications service providers, and other bandwidth-intensive organizations in North America, Europe, Asia, Australia, and Brazil. The company offers on-net Internet access and private network services to law firms, financial services firms, advertising and marketing firms, other professional services businesses, other Internet service providers, telephone companies, cable television companies, Web hosting companies, content delivery network companies, and commercial content and application service providers. It also provides on-net services in carrier-neutral data centers, Cogent controlled data centers, and single-tenant office buildings. In addition, the company offers off-net services to businesses that are connected to its network primarily by means of ‘last mile’ access service lines obtained from other carriers primarily in the form of metropolitan Ethernet circuits. Further, it provides Internet connectivity to customers that are not located in buildings directly connected to its network, as well as offers voice services. The company operates 52 data centers. Cogent Communications Holdings, Inc. was founded in 1999 and is headquartered in Washington, the District of Columbia.
Telecom Italia Company Profile
Telecom Italia S.p.A., together with its subsidiaries, provides fixed and mobile telecommunications services in Europe, South America, and the Mediterranean Basin. The company operates through Domestic, Brazil, and Other Operations segments. It offers fixed and mobile voice and Internet, and public telephony services, as well as products managed and developed for individuals and families; and voice, data, and Internet services and products, and information and communications technology solutions for small and medium-size enterprises, small offices/home offices, the public sector, large accounts, and enterprises in the fixed and mobile telecommunications markets. The company also manages and develops a portfolio of regulated and unregulated wholesale services for fixed and mobile telecommunications operators; provision of infrastructure for housing radio transmission equipment of mobile telephone networks; and development, engineering, building, and operation of network infrastructures, information technology (IT), real estate properties, and plant engineering. In addition, it engages in customer care, operating credit support, loyalty, and retention activities; and staff functions and other support activities. Further, the company offers office products and services for IT sector. The company was founded in 1908 and is headquartered in Rome, Italy.
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