Darden Restaurants (NYSE:DRI – Get Free Report) and Rocky Mountain Chocolate Factory (NASDAQ:RMCF – Get Free Report) are both retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, risk, earnings, profitability, valuation, dividends and institutional ownership.
Institutional and Insider Ownership
93.6% of Darden Restaurants shares are held by institutional investors. Comparatively, 50.3% of Rocky Mountain Chocolate Factory shares are held by institutional investors. 0.5% of Darden Restaurants shares are held by company insiders. Comparatively, 25.2% of Rocky Mountain Chocolate Factory shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Profitability
This table compares Darden Restaurants and Rocky Mountain Chocolate Factory’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Darden Restaurants | 9.13% | 57.44% | 9.62% |
| Rocky Mountain Chocolate Factory | -19.84% | -93.38% | -25.65% |
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Darden Restaurants | 0 | 10 | 17 | 0 | 2.63 |
| Rocky Mountain Chocolate Factory | 1 | 0 | 0 | 0 | 1.00 |
Darden Restaurants presently has a consensus price target of $228.88, indicating a potential upside of 16.78%. Given Darden Restaurants’ stronger consensus rating and higher probable upside, equities analysts plainly believe Darden Restaurants is more favorable than Rocky Mountain Chocolate Factory.
Risk & Volatility
Darden Restaurants has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500. Comparatively, Rocky Mountain Chocolate Factory has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500.
Earnings and Valuation
This table compares Darden Restaurants and Rocky Mountain Chocolate Factory”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Darden Restaurants | $13.21 billion | 1.70 | $1.21 billion | $10.38 | 18.88 |
| Rocky Mountain Chocolate Factory | $27.50 million | 0.34 | -$4.56 million | ($0.53) | -1.89 |
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.
Summary
Darden Restaurants beats Rocky Mountain Chocolate Factory on 12 of the 14 factors compared between the two stocks.
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.
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.
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