Brinker International (NYSE:EAT) and Rocky Mountain Chocolate Factory (NASDAQ:RMCF) Head-To-Head Comparison

Rocky Mountain Chocolate Factory (NASDAQ:RMCF) and Brinker International (NYSE:EAT) are both retail/wholesale companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, institutional ownership, analyst recommendations and risk.

Volatility and Risk

Rocky Mountain Chocolate Factory has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500. Comparatively, Brinker International has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500.

Earnings & Valuation

This table compares Rocky Mountain Chocolate Factory and Brinker International”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rocky Mountain Chocolate Factory	$27.24 million	0.30	-$4.56 million	($0.61)	-1.42
Brinker International	$5.38 billion	1.64	$383.10 million	$10.20	20.16

Brinker International has higher revenue and earnings than Rocky Mountain Chocolate Factory. Rocky Mountain Chocolate Factory is trading at a lower price-to-earnings ratio than Brinker International, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

50.3% of Rocky Mountain Chocolate Factory shares are held by institutional investors. 25.2% of Rocky Mountain Chocolate Factory shares are held by company insiders. Comparatively, 1.4% of Brinker International shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Rocky Mountain Chocolate Factory and Brinker International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rocky Mountain Chocolate Factory	-19.84%	-100.52%	-26.22%
Brinker International	8.07%	123.22%	16.94%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Rocky Mountain Chocolate Factory and Brinker International, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rocky Mountain Chocolate Factory	1	0	0	0	1.00
Brinker International	0	7	14	1	2.73

Brinker International has a consensus target price of $193.25, indicating a potential downside of 6.04%. Given Brinker International’s stronger consensus rating and higher possible upside, analysts clearly believe Brinker International is more favorable than Rocky Mountain Chocolate Factory.

Summary

Brinker International beats Rocky Mountain Chocolate Factory on 13 of the 15 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 Brinker International

Brinker International, Inc., together with its subsidiaries, engages in the ownership, development, operation, and franchising of casual dining restaurants in the United States and internationally. It operates and franchises Chili's Grill & Bar and Maggiano's Little Italy restaurant brands. The company also operates virtual brands, It's Just Wings. Brinker International, Inc. was founded in 1975 and is headquartered in Dallas, Texas.