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Confectioners Industry Comparison

Industry Analysis Comparison Chart

This past month I took a look at the Confectioners Industry, including candy giants Hershey, Tootsie Roll, Nestle, and a micro-cap chocolate maker, Rocky Mountain Chocolate Factory. This table highlights the important metrics of each company, for easy comparison.

If you missed any of the analysis posts, check them out

Hershey Company

Tootsie Roll Industries

Nestle

Rocky Mountain Chocolate Factory

*Unless otherwise stated, all growth rates and averages are based on a 10 year history

Hershey (HSY)Tootsie Roll (TR)Nestle (NSRGY.PK)Rocky Mountain Chocolate Factory (RMCF)
Revenue Growth3.5%1.7%2.9%2.6%
Avg. Gross Margin37.7%40.4%57.6%49.8%
Operating Margins15.4%19.9%13.3%19.1%
Net Margin8.8%14.1%13.3%11.7%
Dividend Growth9.1%3.2%12.4%N/A
EPS Growth13.1%(4.8)%21.5%N/A
FCF GrowthN/A(2.5%)6.7%10.3%
Payout Ratio58%24%18%69%
Cash Payout RatioN/A33%74.1%49.3%
Current Ratio1.53.81.33.7
Total Debt / Equity2.01.320
Avg. Return on Equity43.9%11.3%24.9%25.7%
Avg. Cash Return on Capital16.5%10%16.1%27.5%
5 Year Avg. Low p/e23.52316.512.1
Current p/e (ttm)22.929.75.617.7
Current p/e (forward)18.229.715.9N/A



It seems there are better businesses out there than candy makers. Nestle is the strongest company of the group, and if I had to choose one, this would be it. But as I stated in my analysis, my inadequate knowledge of investing in a foreign dividend paying company will keep me on the sidelines. Plus, there are better businesses here at home.

Rocky Mountain Chocolate Factory did catch my eye, and will stay on my watchlist for the next few years. If they can accelerate growth and maintain a generous dividend policy, I might add a small position.

Full Disclosure: I have no position in the stocks mentioned. My Current Portfolio Holdings can be seen here

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    • MoneyCone Mar 10, 2011, 9:59 am

      I seriously need to follow Nestle closely! They look very attractive at least from the numbers – thanks for putting together the table!

    • Michel Mar 11, 2011, 6:11 am

      Nestle is a great icon, with even better years ahead. Incidently, some of their employees speak very highly of the company and its future. Also, to add to your table, the dividend is 2.5%.

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