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From Double-Digit Growth To Dividend Hikes, Cogent Communications Has It All

From Double-Digit Growth To Dividend Hikes, Cogent Communications Has It All
Related CCOI
Benzinga's Top Upgrades, Downgrades For May 29, 2018
Deutsche Bank Steps To The Sidelines On Cogent Communications

Cogent Communications Holdings Inc (NASDAQ: CCOI) shares were seen up 1.1 percent on Friday after Deutsche Bank initiated coverage of the telecom stock at Buy and set a $48 price target. According to Deutsche Bank analyst Matthew Niknam, Cogent has the rare combination of double-digit growth expectations, accelerating profitability and increasing shareholder returns. Especially in the telecom space, Niknam said companies that can deliver on all three of those fronts are few and far between.

“We view CCOI as a beneficiary of key industry tailwinds (pure play on fiber-based, IP traffic growth), with company-specific drivers (cost efficiencies, declining capital intensity) further bolstering FCF,” Niknam explained.

Set Apart

He said Cogent's growth prospects stand out against a backdrop of telecom companies whose secularly declining businesses may soon put their dividends at risk.

Deutsche Bank is currently projecting a 10 percent revenue compound annual growth rate from Cogent over the next three years. The firm is also projecting EBITDA CAGR of 15 percent in that same time. This strong growth outlook also means the stock’s generous 3.9 percent should be completely safe.

In fact, the firm is projecting a 17 percent CAGR in the stocks dividend payments over the next three years as well.

Cogent shares are up 14.1 percent in the past six months.

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Benzinga's Top Upgrades, Downgrades For March 24, 2017

Latest Ratings for CCOI

May 2018RBC CapitalDowngradesOutperformSector Perform
May 2018Deutsche BankDowngradesBuyHold
Mar 2018GuggenheimInitiates Coverage OnNeutral

View More Analyst Ratings for CCOI
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