Head-To-Head Survey: Cogent Communications (CCOI) & Cincinnati Bell (CBB)

Cincinnati Bell (NYSE: CBB) and Cogent Communications (NASDAQ:CCOI) are both utilities companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, risk, dividends, institutional ownership and profitability.

Dividends

Cogent Communications pays an annual dividend of $1.92 per share and has a dividend yield of 4.3%. Cincinnati Bell does not pay a dividend. 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.

Institutional & Insider Ownership

83.5% of Cincinnati Bell shares are owned by institutional investors. Comparatively, 95.0% of Cogent Communications shares are owned by institutional investors. 1.4% of Cincinnati Bell shares are owned by insiders. Comparatively, 9.5% of Cogent Communications shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Cincinnati Bell 4.13% -2.69% 0.46%
Cogent Communications 3.37% -23.86% 2.18%

Analyst Ratings

This is a summary of recent ratings for Cincinnati Bell and Cogent Communications, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cincinnati Bell 0 2 0 0 2.00
Cogent Communications 5 6 2 0 1.77

Cincinnati Bell presently has a consensus price target of $24.00, suggesting a potential upside of 39.13%. Cogent Communications has a consensus price target of $41.40, suggesting a potential downside of 8.20%. Given Cincinnati Bell’s stronger consensus rating and higher possible upside, analysts plainly believe Cincinnati Bell is more favorable than Cogent Communications.

Volatility and Risk

Cincinnati Bell has a beta of 1.52, indicating that its stock price is 52% more volatile than the S&P 500. Comparatively, Cogent Communications has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500.

Earnings & Valuation

This table compares Cincinnati Bell and Cogent Communications’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cincinnati Bell $1.19 billion 0.61 $102.10 million $0.94 18.35
Cogent Communications $446.90 million 4.64 $14.92 million $0.36 125.28

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

Summary

Cincinnati Bell beats Cogent Communications on 9 of the 16 factors compared between the two stocks.

About Cincinnati Bell

Cincinnati Bell Inc., along with its subsidiaries, provides diversified telecommunications and technology services. The Company operates through two segments: Entertainment and Communications, and IT Services and Hardware. Through its Entertainment and Communications segment, the Company provides high-speed data, video and voice solutions to consumers and businesses over fiber network and a legacy copper network. The IT Services and Hardware segments operates through its subsidiary, Cincinnati Bell Technology Solutions Inc. (CBTS), which is engaged in the sale and service of end-to-end communications and information technology (IT) systems and solutions for business customers across the United States. The Company has interest in CyrusOne Inc., which operates carrier-neutral data center colocation business.

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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