Analyzing Rocky Mountain Chocolate Factory (NASDAQ:RMCF) & Archer Daniels Midland (NYSE:ADM)

Archer Daniels Midland (NYSE:ADM) and Rocky Mountain Chocolate Factory (NASDAQ:RMCF) are both consumer staples companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, risk, analyst recommendations and institutional ownership.

Dividends

Archer Daniels Midland pays an annual dividend of $2.08 per share and has a dividend yield of 2.9%. Rocky Mountain Chocolate Factory pays an annual dividend of $0.48 per share and has a dividend yield of 56.5%. Archer Daniels Midland pays out 57.0% of its earnings in the form of a dividend. Rocky Mountain Chocolate Factory pays out -72.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Archer Daniels Midland has raised its dividend for 53 consecutive years. Rocky Mountain Chocolate Factory is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Archer Daniels Midland and Rocky Mountain Chocolate Factory, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Archer Daniels Midland	2	7	2	0	2.00
Rocky Mountain Chocolate Factory	1	0	0	0	1.00

Archer Daniels Midland currently has a consensus price target of $81.75, indicating a potential upside of 14.46%. Given Archer Daniels Midland’s stronger consensus rating and higher possible upside, research analysts plainly believe Archer Daniels Midland is more favorable than Rocky Mountain Chocolate Factory.

Risk & Volatility

Archer Daniels Midland has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500. Comparatively, Rocky Mountain Chocolate Factory has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500.

Insider and Institutional Ownership

78.3% of Archer Daniels Midland shares are owned by institutional investors. Comparatively, 50.3% of Rocky Mountain Chocolate Factory shares are owned by institutional investors. 0.6% of Archer Daniels Midland shares are owned by insiders. Comparatively, 25.2% of Rocky Mountain Chocolate Factory shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Archer Daniels Midland and Rocky Mountain Chocolate Factory’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Archer Daniels Midland	2.16%	9.21%	3.95%
Rocky Mountain Chocolate Factory	-22.25%	-130.90%	-30.50%

Valuation and Earnings

This table compares Archer Daniels Midland and Rocky Mountain Chocolate Factory”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Archer Daniels Midland	$80.27 billion	0.43	$1.08 billion	$3.65	19.57
Rocky Mountain Chocolate Factory	$27.07 million	0.30	-$4.56 million	($0.66)	-1.29

Archer Daniels Midland has higher revenue and earnings than Rocky Mountain Chocolate Factory. Rocky Mountain Chocolate Factory is trading at a lower price-to-earnings ratio than Archer Daniels Midland, indicating that it is currently the more affordable of the two stocks.

Summary

Archer Daniels Midland beats Rocky Mountain Chocolate Factory on 13 of the 17 factors compared between the two stocks.

About Archer Daniels Midland

Archer-Daniels-Midland Company engages in the procurement, transportation, storage, processing, and merchandising of agricultural commodities, ingredients, flavors, and solutions in the United States, Switzerland, the Cayman Islands, Brazil, Mexico, Canada, the United Kingdom, and internationally. It operates in three segments: Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition. The company originates, merchandises, stores, and transports agricultural raw materials, such as oilseeds and soft seeds. It also engages in the agricultural commodity and feed product import, export, and distribution; and various structured trade finance activities. In addition, the company offers soybean meal and oil; vegetable and salad oils and protein meals; ingredients for the food, feed, energy, and industrial customers; margarine, shortening, and other food products; and partially refined oils to produce biodiesel and glycols for use in chemicals, paints, and other industrial products. Further, it provides peanuts, peanut-derived ingredients, and cotton cellulose pulp; sweeteners, corn and wheat starches, syrup, glucose, wheat flour, and dextrose; alcohol, and other food and animal feed ingredients; ethyl alcohol and ethanol; corn gluten feed and meal; distillers' grains; corn germ; and citric acids. Additionally, the company provides proteins, natural flavors, flavor systems, natural colors, emulsifiers, soluble fiber, polyols, hydrocolloids, probiotics, prebiotics, postbiotics, enzymes, and botanical extracts; and other specialty food and feed ingredients; edible beans; formula feeds, and animal health and nutrition products; and contract and private label pet treats and food products. It also offers futures commission merchant; commodity brokerage services; cash margins and securities pledged to commodity exchange clearinghouse; and cash pledged as security under certain insurance arrangements. The company was founded in 1902 and is headquartered in Chicago, Illinois.

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.