Rocky Mountain Chocolate Factory (NASDAQ:RMCF) & Ingredion (NYSE:INGR) Head-To-Head Review

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

Institutional & Insider Ownership

50.3% of Rocky Mountain Chocolate Factory shares are held by institutional investors. Comparatively, 85.3% of Ingredion shares are held by institutional investors. 25.2% of Rocky Mountain Chocolate Factory shares are held by insiders. Comparatively, 1.6% of Ingredion shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Rocky Mountain Chocolate Factory pays an annual dividend of $0.48 per share and has a dividend yield of 56.5%. Ingredion pays an annual dividend of $3.32 per share and has a dividend yield of 3.4%. Rocky Mountain Chocolate Factory pays out -72.7% of its earnings in the form of a dividend. Ingredion pays out 36.2% 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. Ingredion has raised its dividend for 14 consecutive years. Rocky Mountain Chocolate Factory is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rocky Mountain Chocolate Factory	$27.07 million	0.30	-$4.56 million	($0.66)	-1.29
Ingredion	$7.22 billion	0.85	$729.00 million	$9.17	10.59

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

Risk & Volatility

Rocky Mountain Chocolate Factory has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500. Comparatively, Ingredion has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Rocky Mountain Chocolate Factory	-22.25%	-130.90%	-30.50%
Ingredion	8.21%	15.40%	8.48%

Analyst Ratings

This is a breakdown of recent ratings for Rocky Mountain Chocolate Factory and Ingredion, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rocky Mountain Chocolate Factory	1	0	0	0	1.00
Ingredion	0	8	1	0	2.11

Ingredion has a consensus price target of $120.29, suggesting a potential upside of 23.87%. Given Ingredion’s stronger consensus rating and higher possible upside, analysts plainly believe Ingredion is more favorable than Rocky Mountain Chocolate Factory.

Summary

Ingredion beats Rocky Mountain Chocolate Factory on 13 of the 17 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 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.

About Ingredion

Ingredion Incorporated, together with its subsidiaries, manufactures and sells sweeteners, starches, nutrition ingredients, and biomaterial solutions derived from wet milling and processing corn, and other starch-based materials to a range of industries in North America, South America, the Asia Pacific, Europe, the Middle East, and Africa. The company offers starch products for use in a range of processed foods; cornstarch; specialty paper starches for enhanced drainage, fiber retention, oil and grease resistance, improved printability, and biochemical oxygen demand control; starches and specialty starches for textile industry; industrial starches are used in the production of construction materials, textiles, adhesives, pharmaceuticals, and cosmetics, as well as in mining and water filtration; and specialty industrial starches for use in biomaterial applications, including biodegradable plastics, fabric softeners and detergents, hair and skin care applications, dusting powders for surgical gloves, and in the production of glass fiber and insulation. It also provides sweetener products comprising glucose syrups, high maltose syrup, high fructose corn syrup, dextrose, polyols, maltodextrin, glucose syrup solids, and non-genetically modified organism syrups for applications in food and beverage products, such as baked goods, snack foods, canned fruits, condiments, candy and other sweets, dairy products, ice cream, jams and jellies, prepared mixes, table syrups, and beverages. In addition, the company sells refined corn oil, corn gluten feed, and corn gluten meal; and other products, including fruit and vegetable products, such as concentrates, purees, and essences, as well as pulse proteins and hydrocolloids systems and blends. The company was formerly known as Corn Products International, Inc. and changed its name to Ingredion Incorporated in June 2012. Ingredion Incorporated was founded in 1906 and is headquartered in Westchester, Illinois.