Darden Restaurants (NYSE:DRI) & Rocky Mountain Chocolate Factory (NASDAQ:RMCF) Head to Head Contrast

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

Valuation & Earnings

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%

Risk & Volatility

Rocky Mountain Chocolate Factory has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500. Comparatively, Darden Restaurants has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500.

Insider and Institutional 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 insiders. Comparatively, 0.5% of Darden Restaurants shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Rocky Mountain Chocolate Factory and Darden Restaurants, as reported 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

Darden Restaurants has a consensus price target of $229.32, suggesting a potential upside of 13.97%. Given Darden Restaurants’ stronger consensus rating and higher possible upside, analysts clearly believe Darden Restaurants is more favorable than Rocky Mountain Chocolate Factory.

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.