Rocky Mountain Chocolate Factory (NASDAQ:RMCF – Get Free Report) and Darden Restaurants (NYSE:DRI – Get Free Report) are both retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, earnings, dividends, risk and valuation.
Institutional and Insider Ownership
50.3% of Rocky Mountain Chocolate Factory shares are held by institutional investors. Comparatively, 93.6% of Darden Restaurants shares are held by institutional investors. 25.2% of Rocky Mountain Chocolate Factory shares are held by company insiders. Comparatively, 0.5% of Darden Restaurants shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Analyst Recommendations
This is a breakdown of recent ratings for Rocky Mountain Chocolate Factory and Darden Restaurants, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Rocky Mountain Chocolate Factory | 1 | 0 | 0 | 0 | 1.00 |
| Darden Restaurants | 0 | 10 | 17 | 0 | 2.63 |
Volatility & Risk
Rocky Mountain Chocolate Factory has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500. Comparatively, Darden Restaurants has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500.
Earnings and Valuation
This table compares Rocky Mountain Chocolate Factory and Darden Restaurants”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Rocky Mountain Chocolate Factory | $27.50 million | 0.37 | -$4.56 million | ($0.53) | -2.06 |
| Darden Restaurants | $13.21 billion | 1.74 | $1.21 billion | $10.38 | 19.39 |
Darden Restaurants has higher revenue and earnings than Rocky Mountain Chocolate Factory. Rocky Mountain Chocolate Factory is trading at a lower price-to-earnings ratio than Darden Restaurants, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Rocky Mountain Chocolate Factory and Darden Restaurants’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Rocky Mountain Chocolate Factory | -16.58% | -75.71% | -21.90% |
| Darden Restaurants | 9.13% | 57.44% | 9.62% |
Summary
Darden Restaurants beats Rocky Mountain Chocolate Factory on 12 of the 14 factors compared between the two stocks.
About Rocky Mountain Chocolate Factory
Rocky Mountain Chocolate Factory, Inc., together with its subsidiaries, operates as a confectionery franchisor, manufacturer, and retail operator. It operates through Franchising, Manufacturing, Retail Stores, and Other segments. The company produces approximately 400 chocolate candies and other confectionery products, including clusters, caramels, creams, toffees, mints, and truffles; and offers 15 varieties of caramel apples and other products that are prepared in individual stores, as well as provides ice cream, coffee, and other sundries. Rocky Mountain Chocolate Factory, Inc. was founded in 1981 and is headquartered in Durango, Colorado.
About Darden Restaurants
Darden Restaurants, Inc., together with its subsidiaries, owns and operates full-service restaurants in the United States and Canada. It operates under Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze, Eddie V’s Prime Seafood, and Capital Burger brand names. Darden Restaurants, Inc. was incorporated in 1995 and is based in Orlando, Florida.
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