Cogent Communications (CCOI) vs. Shaw Communications (SJR) Head-To-Head Review

Cogent Communications (NASDAQ: CCOI) and Shaw Communications (NYSE:SJR) are both mid-cap telecommunications services companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, valuation, earnings, risk and dividends.

Dividends

Cogent Communications pays an annual dividend of $1.92 per share and has a dividend yield of 4.3%. Shaw Communications pays an annual dividend of $0.92 per share and has a dividend yield of 4.2%. 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. Shaw Communications pays out 95.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

Cogent Communications has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500. Comparatively, Shaw Communications has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Cogent Communications and Shaw Communications, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cogent Communications 5 6 2 0 1.77
Shaw Communications 1 4 1 0 2.00

Cogent Communications currently has a consensus price target of $41.40, indicating a potential downside of 6.65%. Shaw Communications has a consensus price target of $27.33, indicating a potential upside of 25.96%. Given Shaw Communications’ stronger consensus rating and higher possible upside, analysts clearly believe Shaw Communications is more favorable than Cogent Communications.

Earnings & Valuation

This table compares Cogent Communications and Shaw Communications’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cogent Communications $446.90 million 4.56 $14.92 million $0.35 126.71
Shaw Communications $3.70 billion 2.80 $644.63 million $0.96 22.60

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

Institutional & Insider Ownership

95.0% of Cogent Communications shares are owned by institutional investors. Comparatively, 52.5% of Shaw Communications shares are owned by institutional investors. 9.5% of Cogent Communications shares are owned by company insiders. Comparatively, 1.0% of Shaw Communications shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Cogent Communications 3.37% -23.86% 2.18%
Shaw Communications 17.34% 9.89% 3.97%

Summary

Shaw Communications beats Cogent Communications on 10 of the 16 factors compared between the two stocks.

About Cogent Communications

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.

About Shaw Communications

Shaw Communications Inc. (Shaw) is a diversified connectivity provider. The Company operates through four divisions: Consumer, Wireless, Business Network Services and Business Infrastructure Services. Under the Consumer division, the Company offers Cable telecommunications and Satellite video services to residential customers. Its Business Network Services division offers data networking, Cable telecommunications, Satellite video and fleet tracking services to businesses and public sector entities. Its Business Infrastructure Services division offers data center colocation, cloud technology and managed information technology (IT) solutions to businesses. The Company offers wireless services for voice and data communications through its Wireless division. Its wireline services offer approximately 120 high definition (HD) channels and over 10,000 on-demand, pay-per-view and subscription movie and television programming titles.

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