Head to Head Analysis: Cogent Communications (NASDAQ:CCOI) & American Software (NASDAQ:AMSWA)
Cogent Communications (NASDAQ:CCOI) and American Software (NASDAQ:AMSWA) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, profitability, risk, earnings, institutional ownership, analyst recommendations and dividends.
This table compares Cogent Communications and American Software’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of recent ratings and target prices for Cogent Communications and American Software, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Cogent Communications presently has a consensus price target of $74.63, indicating a potential downside of 1.07%. American Software has a consensus price target of $19.50, indicating a potential upside of 18.11%. Given American Software’s stronger consensus rating and higher possible upside, analysts clearly believe American Software is more favorable than Cogent Communications.
Insider and Institutional Ownership
86.6% of Cogent Communications shares are owned by institutional investors. Comparatively, 77.4% of American Software shares are owned by institutional investors. 10.7% of Cogent Communications shares are owned by company insiders. Comparatively, 11.2% of American Software 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.
Cogent Communications pays an annual dividend of $2.64 per share and has a dividend yield of 3.5%. American Software pays an annual dividend of $0.44 per share and has a dividend yield of 2.7%. Cogent Communications pays out 347.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American Software pays out 157.1% 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 has raised its dividend for 8 consecutive years. Cogent Communications is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares Cogent Communications and American Software’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Cogent Communications||$546.16 million||6.51||$37.52 million||$0.76||99.25|
|American Software||$108.71 million||4.85||$6.80 million||$0.28||58.96|
Cogent Communications has higher revenue and earnings than American Software. American Software is trading at a lower price-to-earnings ratio than Cogent Communications, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Cogent Communications has a beta of 0.25, meaning that its stock price is 75% less volatile than the S&P 500. Comparatively, American Software has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500.
American Software beats Cogent Communications on 9 of the 17 factors compared between the two stocks.
Cogent Communications Company Profile
Cogent Communications Holdings, Inc., through its subsidiaries, provides high-speed Internet access, private network, and data center colocation space services primarily to small and medium-sized businesses, communications service providers, and other bandwidth-intensive organizations in North America, Europe, Asia, Australia, and Brazil. The company offers on-net Internet access and private network services to law firms, financial services firms, advertising and marketing firms, other professional services businesses, other Internet service providers, telephone companies, cable television companies, Web hosting companies, content delivery network companies, and commercial content and application service providers. It also provides on-net services in carrier-neutral data centers, Cogent controlled data centers, and single-tenant office buildings. In addition, the company offers off-net services to businesses that are connected to its network primarily by means of ‘last mile’ access service lines obtained from other carriers primarily in the form of metropolitan Ethernet circuits. Further, it provides Internet connectivity to customers that are not located in buildings directly connected to its network, as well as offers voice services. The company operates 52 data centers. Cogent Communications Holdings, Inc. was founded in 1999 and is headquartered in Washington, the District of Columbia.
American Software Company Profile
American Software, Inc. develops, markets, and supports a portfolio of software and services worldwide. It operates in three segments: Supply Chain Management (SCM), Information Technology (IT) Consulting, and Other. The SCM segment provides supply chain management and retail planning solutions, including sales and operations planning, demand and inventory optimization, manufacturing planning and scheduling, supply optimization, retail allocation and merchandise planning, and transportation optimization solutions to streamline and optimize the forecasting, inventory, production scheduling, production, supply, allocation, distribution, and management of products between trading partners. This segment also offers cloud solutions for supply chain management, product lifecycle management, vendor quality, and vendor compliance and corporate social responsibility for brand retailers and manufacturers; and analytics and business intelligence solutions for the supply chain market. The IT Consulting segment offers IT staffing and consulting services, such as professional services/product management/project management, staff augmentation, and social media and analytic marketing, as well as cloud, collaboration, network, and security services for software enhancement, documentation, update, customer education, consulting, systems integration, maintenance, and other support services. The Other segment provides purchasing and materials management, customer order processing, financial, e-commerce, and traditional manufacturing solutions. The company markets its products through direct and indirect sales channels to retail, apparel, footwear, consumer packaged goods, chemicals, oil and gas, life sciences, telecommunications, consumer electronics, industrial products, and other manufacturing industries. American Software, Inc. was founded in 1970 and is headquartered in Atlanta, Georgia.
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