Head to Head Analysis: Brinker International (NYSE:EAT) and Rocky Mountain Chocolate Factory (NASDAQ:RMCF)

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

Risk and Volatility

Brinker International has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500. Comparatively, Rocky Mountain Chocolate Factory has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Brinker International	$5.38 billion	1.74	$383.10 million	$10.20	21.37
Rocky Mountain Chocolate Factory	$27.50 million	0.29	-$4.56 million	($0.61)	-1.39

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 & Institutional Ownership

50.3% of Rocky Mountain Chocolate Factory shares are held by institutional investors. 1.4% of Brinker International shares are held by insiders. Comparatively, 25.2% of Rocky Mountain Chocolate Factory shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations for Brinker International and Rocky Mountain Chocolate Factory, as reported by MarketBeat.

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

Brinker International presently has a consensus price target of $193.25, suggesting a potential downside of 11.33%. Given Brinker International’s stronger consensus rating and higher possible upside, equities analysts plainly believe Brinker International is more favorable than Rocky Mountain Chocolate Factory.

Profitability

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

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

Summary

Brinker International beats Rocky Mountain Chocolate Factory on 13 of the 15 factors compared between the two stocks.

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.

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.