Which Brokerage Stocks Have the Strongest Earnings Trends?

Earnings trends are extremely important when evaluating stocks. At Wall St. Cheat Sheet, we view increasing earnings quarter-over-quarter as a simple way to gauge whether costs and the business model are stable. Then we like to analyze whether the company is outperforming peers in the sector. This is what we call the “E-Squared” investment analysis (‘E = Earnings Are Increasing Quarter-Over-Quarter’ + ‘E = Excellent Relative Performance Versus Peers and Sector’).

Stocks with improving earnings metrics are worthy of your extra attention. Click here to discover our CHEAT SHEET stock picks now!

Here’s your Cheat Sheet to how the top 4 brokerage stocks rank via earnings trends:

Charles Schwab Corp. (NYSE:SCHW): Current Price $15.45

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 5,150 4,193 4,248 4,691 4,883
Diluted EPS ($) 1.05 0.68 0.38 0.70 0.69

Schwab has been very inconsistent with earnings since 2007. Clearly, this is not a strong trend for EPS.

Let’s take a closer look at the quarterly data:

Quarter Dec. 31, 2011 Mar. 31, 2012 Jun. 30, 2012 Sep. 30, 2012 Dec. 31, 2012
Revenue ($) in millions 1,113 1,189 1,283 1,196 1,215
Diluted EPS ($) 0.12 0.15 0.20 0.19 0.15

Earnings over the last two quarters are slowing down, and we need to look for better candidates…