Critical Comparison: Cogent Communications (NASDAQ:CCOI) versus Deutsche Telekom (OTCMKTS:DTEGY)

Deutsche Telekom (OTCMKTS:DTEGY) and Cogent Communications (NASDAQ:CCOI) 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.