Head to Head Review: Cogent Communications (NASDAQ:CCOI) and Swisscom (OTCMKTS:SCMWY)

Swisscom (OTCMKTS:SCMWY) and Cogent Communications (NASDAQ:CCOI) are both communication services companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Swisscom	$18.16 billion	25.00	$1.53 billion	$3.13	27.99
Cogent Communications	$946.47 million	0.22	-$182.17 million	($0.71)	-5.61

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

Dividends

Swisscom pays an annual dividend of $2.03 per share and has a dividend yield of 2.3%. Cogent Communications pays an annual dividend of $0.08 per share and has a dividend yield of 2.0%. Swisscom pays out 64.9% of its earnings in the form of a dividend. Cogent Communications pays out -11.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Cogent Communications has increased its dividend for 14 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Swisscom	8.73%	11.18%	3.65%
Cogent Communications	-3.53%	N/A	-4.58%

Risk & Volatility

Swisscom has a beta of 0.29, suggesting that its share price is 71% less volatile than the S&P 500. Comparatively, Cogent Communications has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Swisscom and Cogent Communications, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Swisscom	3	5	0	0	1.62
Cogent Communications	2	6	2	0	2.00

Cogent Communications has a consensus target price of $18.94, indicating a potential upside of 375.99%. Given Cogent Communications’ stronger consensus rating and higher possible upside, analysts plainly believe Cogent Communications is more favorable than Swisscom.

Institutional and Insider Ownership

92.4% of Cogent Communications shares are owned by institutional investors. 1.0% of Swisscom shares are owned by company insiders. Comparatively, 4.2% of Cogent Communications shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Swisscom beats Cogent Communications on 9 of the 17 factors compared between the two stocks.

About Swisscom

Swisscom AG provides telecommunication services primarily in Switzerland, Italy, and internationally. It operates through three segments: Swisscom Switzerland, Fastweb, and Other Operating. The company offers mobile and fixed-network services, such as telephony, TV, broadband, and mobile offerings, as well as sells terminal equipment; and telecom and communications solutions for large corporations and small and medium-sized enterprises. It also provides cloud, outsourcing, workplace, mobile phone, networking, business process optimization, SAP, and security and authentication solutions, as well as a range of services to the banking industry; Internet of Things solutions; digitization services to the healthcare sector; IT systems for health insurance companies; fixed-line and mobile networks by other telecommunication service providers; and roaming to foreign operators whose customers use its mobile networks, as well as broadband services and regulated products. In addition, the company plans, operates, and maintains network infrastructure and IT systems; provides support functions to finance, human resource, and strategy, as well as management of real estate and vehicle fleet; and offers broadband and mobile services, such as telephony, mobile offerings, and broadband services, as well as ICT solutions for residential, business, and wholesale customers. Further, it provides IT and network services; online and telephone directories; and cross-platform retail media and security communication services, as well as builds and maintains wired and wireless networks. The company was founded in 1998 and is based in Bern, Switzerland.

About Cogent Communications

Cogent Communications Holdings, Inc., through its subsidiaries, provides high-speed Internet access, private network, and data center colocation space services in North America, Europe, Oceania, South America, and Africa. The company offers on-net Internet access and private network services to law firms, financial services firms, and advertising and marketing firms, as well as heath care providers, educational institutions and other professional services businesses, other Internet service providers, telephone companies, cable television companies, web hosting companies, media service providers, mobile phone operators, content delivery network companies, and commercial content and application service providers. It also provides Internet access and private network services to customers that are not located in buildings directly connected to its network; and on-net services to customers located in buildings that are physically connected to its network. In addition, the company offers off-net services to corporate customers using other carriers' circuits to provide the last mile portion of the link from the customers' premises to the network. Further, it operates data centers that allow its customers to collocate their equipment and access the network. It serves primarily to small and medium-sized businesses, communications service providers, and other bandwidth-intensive organizations. Cogent Communications Holdings, Inc. was founded in 1999 and is headquartered in Washington, the District of Columbia.