Critical Contrast: Rocky Mountain Chocolate Factory (RMCF) vs. Tootsie Roll Industries (TR)

Rocky Mountain Chocolate Factory (NASDAQ: RMCF) and Tootsie Roll Industries (NYSE:TR) are both small-cap retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their risk, valuation, dividends, analyst recommendations, earnings, profitability and institutional ownership.

Dividends

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Rocky Mountain Chocolate Factory pays an annual dividend of $0.48 per share and has a dividend yield of 4.2%. Tootsie Roll Industries pays an annual dividend of $0.36 per share and has a dividend yield of 1.3%. Tootsie Roll Industries has increased its dividend for 52 consecutive years.

Analyst Ratings

This is a summary of current recommendations for Rocky Mountain Chocolate Factory and Tootsie Roll Industries, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rocky Mountain Chocolate Factory 0 0 0 0 N/A
Tootsie Roll Industries 0 0 0 0 N/A

Institutional & Insider Ownership

40.9% of Rocky Mountain Chocolate Factory shares are held by institutional investors. Comparatively, 21.3% of Tootsie Roll Industries shares are held by institutional investors. 13.1% of Rocky Mountain Chocolate Factory shares are held by company insiders. Comparatively, 65.5% of Tootsie Roll Industries shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Rocky Mountain Chocolate Factory has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500. Comparatively, Tootsie Roll Industries has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500.

Profitability

This table compares Rocky Mountain Chocolate Factory and Tootsie Roll Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rocky Mountain Chocolate Factory 8.50% 16.75% 10.93%
Tootsie Roll Industries 15.38% 10.97% 8.52%

Earnings & Valuation

This table compares Rocky Mountain Chocolate Factory and Tootsie Roll Industries’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rocky Mountain Chocolate Factory $38.30 million 1.77 $3.45 million N/A N/A
Tootsie Roll Industries $515.67 million 3.53 $80.86 million N/A N/A

Tootsie Roll Industries has higher revenue and earnings than Rocky Mountain Chocolate Factory.

Summary

Tootsie Roll Industries beats Rocky Mountain Chocolate Factory on 7 of the 12 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 five segments, Franchising, Manufacturing, Retail Stores, U-Swirl Operations, and Other. The company produces approximately 350 chocolate candies and other confectionery products, including clusters, caramels, creams, 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. As of March 31, 2017, it operated 4 Company-owned, 83 licensee-owned, and 283 franchised Rocky Mountain Chocolate Factory stores operating in the United states, Canada, Japan, South Korea, the Philippines, and the United Arab Emirates; 5 Company-owned caf茅s, 105 franchised caf茅s, and 40 licensed locations located in the United states and Canada; and self-serve frozen yogurt caf茅s under the U-Swirl, Yogurtini, CherryBerry, Yogli Mogli Frozen Yogurt, Fuzzy Peach Frozen Yogurt, Let's Yo!, and Aspen Leaf Yogurt names. The company was founded in 1981 and is headquartered in Durango, Colorado.

About Tootsie Roll Industries

Tootsie Roll Industries, Inc., together with its subsidiaries, manufactures and sells confectionery products primarily in the United States, Canada, and Mexico. The company sells its products under the TOOTSIE ROLL, TOOTSIE POPS, CHILD'S PLAY, CARAMEL APPLE POPS, CHARMS, BLOW-POP, CHARMS MINI POPS, CELLA'S, DOTS, JUNIOR MINTS, CHARLESTON CHEW, SUGAR DADDY, SUGAR BABIES, ANDES, FLUFFY STUFF, DUBBLE BUBBLE, RAZZLES, CRY BABY, NIK-L-NIP, and TUTSI POP trademarks. Tootsie Roll Industries, Inc. sells its products directly to wholesale distributors of candy and groceries, supermarkets, variety stores, dollar stores, chain grocers, drug chains, discount chains, cooperative grocery associations, mass merchandisers, warehouse and membership club stores, vending machine operators, the United States military, and fund-raising charitable organizations, as well as through candy and grocery brokers. The company was founded in 1896 and is based in Chicago, Illinois.

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