Head to Head Contrast: Noble Roman’s (OTCMKTS:NROM) vs. Rocky Mountain Chocolate Factory (NASDAQ:RMCF)

Rocky Mountain Chocolate Factory (NASDAQ:RMCF) and Noble Roman’s (OTCMKTS:NROM) are both small-cap retail/wholesale companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, analyst recommendations, dividends, earnings and profitability.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Rocky Mountain Chocolate Factory	-13.62%	-62.48%	-19.16%
Noble Roman’s	6.22%	36.47%	5.97%

Analyst Ratings

This is a summary of current ratings and recommmendations for Rocky Mountain Chocolate Factory and Noble Roman’s, 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
Noble Roman’s	0	0	0	0	0.00

Volatility & Risk

Rocky Mountain Chocolate Factory has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, Noble Roman’s has a beta of 0.37, suggesting that its stock price is 63% less volatile than the S&P 500.

Earnings and Valuation

This table compares Rocky Mountain Chocolate Factory and Noble Roman’s”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rocky Mountain Chocolate Factory	$29.58 million	0.78	-$6.12 million	($0.52)	-4.75
Noble Roman’s	$15.15 million	0.48	$1.11 million	$0.05	6.58

Noble Roman’s has lower revenue, but higher earnings than Rocky Mountain Chocolate Factory. Rocky Mountain Chocolate Factory is trading at a lower price-to-earnings ratio than Noble Roman’s, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

50.3% of Rocky Mountain Chocolate Factory shares are held by institutional investors. 42.2% of Rocky Mountain Chocolate Factory shares are held by insiders. Comparatively, 25.6% of Noble Roman’s shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

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 Noble Roman’s

Noble Roman's, Inc. sells and services franchises, and licenses and operates foodservice locations for stand-alone restaurants and non-traditional foodservice operations. The company franchises, licenses, and operates foodservice locations under the Noble Roman's Craft Pizza & Pub, Noble Roman's Pizza, Noble Roman's Take-N-Bake, and Tuscano's Italian Style Subs trade names, which provide breadsticks and cheesy stix with dip, pizza, pasta, salads, wings, baked sandwiches, and other related breakfast products, as well as a selection of desserts. The company was incorporated in 1972 and is headquartered in Indianapolis, Indiana.