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Rocky Mountain Chocolate Factory: A SWOT Analysis

John DeFeo profile picture
John DeFeo


  • Rocky Mountain Chocolate Factory has underperformed the market.
  • The company is well run, but the business faces serious challenges.
  • Here is a summary of strengths, weaknesses, opportunities, and threats.

I suspect that Rocky Mountain Chocolate Factory (NASDAQ:RMCF) attracts investors who are hoping to find their own "See's Candies." I put that name in quotes because the California-based candy shop is a famous case study. Warren Buffett acquired See's in 1972 and his $25 million investment has thrown off more than $1 billion in cash. Meanwhile, Rocky Mountain Chocolate Factory operates a similar business and pays a generous 3.92% dividend yield. That sounds attractive, but as much as I love dividends, there are other factors to consider when investing.

I've owned Rocky Mountain Chocolate Factory for years, and though my enthusiasm for the stock has waned, I haven't found an inspiring reason to sell the stock. There are growth opportunities for the company to seize, and there are challenges that the management team must overcome. The future is undecided. To help you clarify your own investment thesis, I've prepared a "SWOT" analysis that highlights the company's strengths, weaknesses, opportunities, and threats, as I see them.


Rocky Mountain's dividend yield is fully supported by cash flow. The company has a strong balance sheet and is led by a conservative management team that is unlikely to make a rash decision. That team has navigated a brutal retail environment better than others have, and its executive compensation is reasonable. The company is generally well reviewed (by employees) on Glassdoor. You'll also find that most of the company's retail locations are well reviewed on Yelp. The locations with truly bad reviews are almost all permanently closed. I've eaten at several of the company's franchises in the U.S. and Canada and have been consistently impressed by each store's confections and customer service. In a nutshell, I'd summarize the company's strengths as good products, good people, and good finances.


I'm not confident in the

This article was written by

John DeFeo profile picture
I'm an avid (albeit, part-time) investor, inspired by Benjamin Graham, Peter Lynch, and strangely enough, David Ogilvy. Dividend investing is my bag and I rely on a toolset of fundamental analysis techniques. In a past life, I served as Director of Business Intelligence for TheStreet.com.

Analyst’s Disclosure: I am/we are long RMCF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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