Head-To-Head Comparison: Spok (NASDAQ:SPOK) vs. Cogent Communications (NASDAQ:CCOI)

Spok (NASDAQ:SPOK) and Cogent Communications (NASDAQ:CCOI) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, risk, institutional ownership, earnings, dividends and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Spok	11.88%	10.88%	7.90%
Cogent Communications	-21.57%	-117.56%	-6.78%

Analyst Recommendations

This is a summary of current ratings and target prices for Spok and Cogent Communications, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Spok	0	0	1	1	3.50
Cogent Communications	2	3	2	0	2.00

Spok presently has a consensus target price of $20.00, suggesting a potential upside of 43.58%. Cogent Communications has a consensus target price of $46.60, suggesting a potential upside of 16.78%. Given Spok’s stronger consensus rating and higher probable upside, equities analysts clearly believe Spok is more favorable than Cogent Communications.

Dividends

Spok pays an annual dividend of $1.25 per share and has a dividend yield of 9.0%. Cogent Communications pays an annual dividend of $4.06 per share and has a dividend yield of 10.2%. Spok pays out 156.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cogent Communications pays out -89.4% of its earnings in the form of a dividend. Cogent Communications has raised its dividend for 14 consecutive years. Cogent Communications is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Spok has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500. Comparatively, Cogent Communications has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500.

Institutional & Insider Ownership

50.8% of Spok shares are owned by institutional investors. Comparatively, 92.4% of Cogent Communications shares are owned by institutional investors. 7.4% of Spok shares are owned by company insiders. Comparatively, 11.4% of Cogent Communications shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Spok and Cogent Communications”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Spok	$139.74 million	2.05	$14.97 million	$0.80	17.41
Cogent Communications	$1.00 billion	1.96	-$204.07 million	($4.54)	-8.79

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

Summary

Spok beats Cogent Communications on 10 of the 18 factors compared between the two stocks.

About Spok

Spok Holdings, Inc., through its subsidiary, Spok, Inc., provides healthcare communication solutions in the United States, Europe, Canada, Australia, Asia, and the Middle East. The company's products and services enhance workflows for clinicians and support administrative compliance. It delivers clinical information to care teams when and where it matters to enhance patient outcomes; and provides GenA Pager, a one-way alphanumeric pager. The company offers subscriptions to one-way or two-way messaging services, as well as alphanumeric pagers that are configurable to support unencrypted or encrypted operation; and ancillary services, such as voicemail, and equipment loss or maintenance protection services, as well as sells devices to resellers who lease or resell them to their subscribers. Its Spok Care Connect suite products for contact centers, clinical alerting and notification, mobile communications and messaging, and public safety notifications. In addition, the company provides professional, software license updates, and product support services, as well as sells third-party equipment. It serves businesses, professionals, management personnel, medical personnel, field sales personnel and service forces, members of the construction industry and construction trades, real estate brokers and developers, sales and services organizations, specialty trade organizations, manufacturing organizations, and government agencies. The company was formerly known as USA Mobility, Inc. and changed its name to Spok Holdings, Inc. in July 2014. Spok Holdings, Inc. was founded in 1986 and is headquartered in Alexandria, Virginia.

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.