Critical Comparison: Cogent Communications (NASDAQ:CCOI) versus Deutsche Telekom (OTCMKTS:DTEGY)
by Danessa Lincoln · The Markets DailyDeutsche Telekom (OTCMKTS:DTEGY – Get Free Report) and Cogent Communications (NASDAQ:CCOI – Get Free Report) are both communication services companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, valuation, profitability, dividends and earnings.
Risk & Volatility
Deutsche Telekom has a beta of 0.39, suggesting that its stock price is 61% 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.
Analyst Recommendations
This is a summary of recent recommendations and price targets for Deutsche Telekom and Cogent Communications, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Deutsche Telekom | 0 | 4 | 2 | 0 | 2.33 |
| Cogent Communications | 2 | 6 | 2 | 0 | 2.00 |
Cogent Communications has a consensus price target of $18.24, indicating a potential upside of 310.91%. Given Cogent Communications’ higher possible upside, analysts clearly believe Cogent Communications is more favorable than Deutsche Telekom.
Institutional & Insider Ownership
92.4% of Cogent Communications shares are owned by institutional investors. 4.2% of Cogent Communications shares are owned 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.
Valuation & Earnings
This table compares Deutsche Telekom and Cogent Communications”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Deutsche Telekom | $134.70 billion | 1.03 | $10.87 billion | $2.16 | 13.45 |
| Cogent Communications | $975.77 million | 0.23 | -$182.17 million | ($0.71) | -6.25 |
Deutsche Telekom has higher revenue and earnings than Cogent Communications. Cogent Communications is trading at a lower price-to-earnings ratio than Deutsche Telekom, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Deutsche Telekom and Cogent Communications’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Deutsche Telekom | 7.32% | 11.58% | 3.61% |
| Cogent Communications | -3.53% | N/A | -4.58% |
Summary
Deutsche Telekom beats Cogent Communications on 9 of the 13 factors compared between the two stocks.
About Deutsche Telekom
Deutsche Telekom is a telecommunications and technology company headquartered in Bonn, Germany. Established in 1995 following the privatization of Germany’s state-owned postal and telecommunications services, it provides mobile and fixed-line communications, broadband internet, television, and digital services. The company serves consumers and businesses in Germany and other European markets, and has a major presence in the United States through T-Mobile US. Its offerings include mobile voice and data plans, fiber and other fixed-network connections, and information technology and communications solutions for business customers.
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.