Comparing Cogent Communications (NASDAQ:CCOI) & BCE (NYSE:BCE)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
BCE	25.49%	12.90%	3.25%
Cogent Communications	-4.73%	N/A	-4.86%

Dividends

BCE pays an annual dividend of $1.26 per share and has a dividend yield of 6.2%. Cogent Communications pays an annual dividend of $0.08 per share and has a dividend yield of 1.2%. BCE pays out 25.8% of its earnings in the form of a dividend. Cogent Communications pays out -8.3% 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.

Institutional and Insider Ownership

41.5% of BCE shares are held by institutional investors. Comparatively, 92.4% of Cogent Communications shares are held by institutional investors. 0.2% of BCE shares are held by company insiders. Comparatively, 4.2% of Cogent Communications shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and price targets for BCE and Cogent Communications, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BCE	0	5	7	0	2.58
Cogent Communications	2	6	3	0	2.09

BCE presently has a consensus target price of $29.00, indicating a potential upside of 42.30%. Cogent Communications has a consensus target price of $19.55, indicating a potential upside of 190.06%. Given Cogent Communications’ higher possible upside, analysts clearly believe Cogent Communications is more favorable than BCE.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BCE	$17.51 billion	1.09	$4.62 billion	$4.89	4.17
Cogent Communications	$957.21 million	0.36	-$182.17 million	($0.96)	-7.02

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

Volatility & Risk

BCE has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500. Comparatively, Cogent Communications has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500.

Summary

BCE beats Cogent Communications on 11 of the 17 factors compared between the two stocks.

About BCE

BCE Inc., a communications company, provides wireless, wireline, Internet, and television (TV) services to residential, business, and wholesale customers in Canada. The company operates through two segments, Bell Communication and Technology Services, and Bell Media. The Bell Communication and Technology Services segment provides wireless products and services including mobile data and voice plans and devices; wireline products and services comprising data, including internet access, internet protocol television, cloud-based services, and business solutions, as well as voice, and other communication services and products; and satellite TV and connectivity services for residential, small and medium-sized business, government, and large enterprise customers. This segment also buys and sells local telephone, long distance, and data and other services from or to resellers and other carriers; and operates consumer electronics retail stores. The Bell Media segment provides conventional TV, specialty TV, pay TV, streaming services, digital media services, radio broadcasting services, and out-of-home advertising services. BCE Inc. was founded in 1880 and is headquartered in Verdun, Canada.

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.