Rocky Mountain Chocolate Factory (NASDAQ:RMCF) & BJ’s Restaurants (NASDAQ:BJRI) Critical Analysis

BJ’s Restaurants (NASDAQ:BJRI) and Rocky Mountain Chocolate Factory (NASDAQ:RMCF) are both small-cap retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.

Risk and Volatility

BJ’s Restaurants has a beta of 1.28, meaning that its stock price is 28% more volatile than the S&P 500. Comparatively, Rocky Mountain Chocolate Factory has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for BJ’s Restaurants and Rocky Mountain Chocolate Factory, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BJ’s Restaurants	2	4	3	0	2.11
Rocky Mountain Chocolate Factory	1	0	0	0	1.00

BJ’s Restaurants presently has a consensus price target of $41.43, indicating a potential downside of 7.38%. Given BJ’s Restaurants’ stronger consensus rating and higher probable upside, equities analysts plainly believe BJ’s Restaurants is more favorable than Rocky Mountain Chocolate Factory.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
BJ’s Restaurants	2.23%	12.92%	4.67%
Rocky Mountain Chocolate Factory	-13.62%	-62.48%	-19.16%

Valuation & Earnings

This table compares BJ’s Restaurants 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
BJ’s Restaurants	$1.36 billion	0.70	$16.69 million	$1.34	33.38
Rocky Mountain Chocolate Factory	$29.58 million	0.64	-$6.12 million	($0.52)	-3.90

BJ’s 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 BJ’s Restaurants, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

100.0% of BJ’s Restaurants shares are owned by institutional investors. Comparatively, 50.3% of Rocky Mountain Chocolate Factory shares are owned by institutional investors. 4.3% of BJ’s Restaurants shares are owned by company insiders. Comparatively, 42.2% of Rocky Mountain Chocolate Factory shares are owned by company 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.

Summary

BJ’s Restaurants beats Rocky Mountain Chocolate Factory on 13 of the 14 factors compared between the two stocks.

About BJ’s Restaurants

BJ’s Restaurants, Inc. owns and operates casual dining restaurants in the United States. Its restaurants offer pizzas, craft and other beers, appetizers, entrées, pastas, sandwiches, specialty salads, and desserts under brand name Pizookie. The company was formerly known as Chicago Pizza & Brewery, Inc. and changed its name to BJ’s Restaurants, Inc. in August 2004. BJ’s Restaurants, Inc. was founded in 1978 and is based in Huntington Beach, California.

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.