Financial Comparison: Cogent Communications (NASDAQ:CCOI) & Swisscom (OTCMKTS:SCMWY)

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

Dividends

Swisscom pays an annual dividend of $2.03 per share and has a dividend yield of 2.4%. Cogent Communications pays an annual dividend of $0.08 per share and has a dividend yield of 1.8%. 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 raised its dividend for 14 consecutive years.

Volatility & Risk

Swisscom has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500. Comparatively, Cogent Communications has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500.

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%

Valuation and Earnings

This table compares Swisscom and Cogent Communications”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Swisscom	$18.16 billion	24.33	$1.53 billion	$3.13	27.24
Cogent Communications	$975.77 million	0.23	-$182.17 million	($0.71)	-6.25

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.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Swisscom and Cogent Communications, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Swisscom	3	4	0	0	1.57
Cogent Communications	2	5	2	0	2.00

Cogent Communications has a consensus price target of $18.24, suggesting a potential upside of 310.91%. Given Cogent Communications’ stronger consensus rating and higher probable upside, analysts plainly believe Cogent Communications is more favorable than Swisscom.

Insider and Institutional Ownership

92.4% of Cogent Communications shares are owned by institutional investors. 1.0% of Swisscom shares are owned by insiders. Comparatively, 4.2% 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.

Summary

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

About Swisscom

Swisscom AG is a telecommunications and information technology company headquartered in Switzerland. It provides mobile and fixed-line phone services, broadband internet, television and related digital services to residential and business customers. Its business offerings also include IT, cloud and cybersecurity solutions. Swisscom serves customers in Switzerland and Italy. In Italy, it operates through Fastweb; following the integration of Vodafone Italia, the business operates under the Fastweb + Vodafone name.

About Cogent Communications

Cogent Communications is a facilities-based provider of internet and data-transport services. Its offerings include dedicated internet access, IP transit, Ethernet and wavelength services, and colocation, serving businesses, communications carriers, government agencies, and other organizations. The company operates a high-capacity network across North America and Europe. It connects customer locations to the internet and provides network capacity for organizations that need to move data between sites or across networks.