Reviewing Telefonica (TEF) and Cogent Communications (CCOI)
Telefonica (NYSE: TEF) and Cogent Communications (NASDAQ:CCOI) are both mid-cap telecommunications services companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.
This is a breakdown of current recommendations for Telefonica and Cogent Communications, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Telefonica currently has a consensus target price of $11.40, indicating a potential upside of 17.04%. Cogent Communications has a consensus target price of $42.67, indicating a potential downside of 6.84%. Given Telefonica’s stronger consensus rating and higher probable upside, analysts clearly believe Telefonica is more favorable than Cogent Communications.
This table compares Telefonica and Cogent Communications’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
0.9% of Telefonica shares are owned by institutional investors. Comparatively, 95.5% of Cogent Communications shares are owned by institutional investors. 0.0% of Telefonica shares are owned by company insiders. Comparatively, 9.5% of Cogent Communications shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Valuation and Earnings
This table compares Telefonica and Cogent Communications’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Telefonica||$57.59 billion||0.85||$2.62 billion||$0.49||19.88|
|Cogent Communications||$446.90 million||4.71||$14.92 million||$0.35||130.86|
Telefonica has higher revenue and earnings than Cogent Communications. Telefonica is trading at a lower price-to-earnings ratio than Cogent Communications, indicating that it is currently the more affordable of the two stocks.
Telefonica pays an annual dividend of $0.35 per share and has a dividend yield of 3.6%. Cogent Communications pays an annual dividend of $1.92 per share and has a dividend yield of 4.2%. Telefonica pays out 71.4% of its earnings in the form of a dividend. Cogent Communications pays out 548.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Volatility and Risk
Telefonica has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500. Comparatively, Cogent Communications has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500.
Telefonica beats Cogent Communications on 11 of the 16 factors compared between the two stocks.
Telefonica Company Profile
Telefonica, S.A. is an integrated and diversified telecommunications group operating in Europe and Latin America. The Company’s services and products include Mobile business, Fixed-line telephony business and Digital services. Its segments include Telefonica Spain, Telefonica Brazil, Telefonica Germany, Telefonica United Kingdom and Telefonica Hispanoamerica (formed by the Company’s operators in Argentina, Chile, Peru, Colombia, Mexico, Venezuela and Central America, Ecuador and Uruguay). These segments are engaged in activities relating to wireline, wireless, cable, data, Internet and television (TV) businesses and other digital services in accordance with each location. It offers a range of mobile and related services and products to personal and business customers. It offers traditional fixed telecommunication services, Internet and broadband multimedia services and data and business-solutions services. It offers a range of digital services, such as Internet of Things (IoT).
Cogent Communications Company Profile
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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