Freshpet (NASDAQ:FRPT – Get Free Report) and Rocky Mountain Chocolate Factory (NASDAQ:RMCF – Get Free Report) are both consumer staples companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, valuation, institutional ownership, profitability, earnings and dividends.
Volatility & Risk
Freshpet has a beta of 1.78, suggesting that its stock price is 78% more volatile than the S&P 500. Comparatively, Rocky Mountain Chocolate Factory has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500.
Earnings and Valuation
This table compares Freshpet and Rocky Mountain Chocolate Factory”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Freshpet | $1.10 billion | 3.01 | $139.14 million | $3.80 | 17.76 |
| Rocky Mountain Chocolate Factory | $27.07 million | 0.30 | -$4.56 million | ($0.66) | -1.29 |
Freshpet has higher revenue and earnings than Rocky Mountain Chocolate Factory. Rocky Mountain Chocolate Factory is trading at a lower price-to-earnings ratio than Freshpet, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
50.3% of Rocky Mountain Chocolate Factory shares are owned by institutional investors. 4.3% of Freshpet shares are owned by company insiders. Comparatively, 25.2% of Rocky Mountain Chocolate Factory shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares Freshpet and Rocky Mountain Chocolate Factory’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Freshpet | 17.28% | 5.97% | 4.07% |
| Rocky Mountain Chocolate Factory | -22.25% | -130.90% | -30.50% |
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Freshpet and Rocky Mountain Chocolate Factory, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Freshpet | 1 | 8 | 9 | 0 | 2.44 |
| Rocky Mountain Chocolate Factory | 1 | 0 | 0 | 0 | 1.00 |
Freshpet currently has a consensus target price of $75.53, indicating a potential upside of 11.90%. Given Freshpet’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Freshpet is more favorable than Rocky Mountain Chocolate Factory.
Summary
Freshpet beats Rocky Mountain Chocolate Factory on 12 of the 14 factors compared between the two stocks.
About Freshpet
Freshpet, Inc., together with its subsidiaries, manufactures, distributes, and markets natural fresh meals and treats for dogs and cats in the United States, Canada, and Europe. It sells dog food, cat food, and dog treats under the Freshpet brand name; and Dognation and Dog Joy labels through various classes of retail, including grocery, mass, club, pet specialty, and natural, as well as online. The company was incorporated in 2004 and is headquartered in Secaucus, New Jersey.
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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