Which Credit Card Stocks have the Strongest Earnings Trends?

January 19, 2013

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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 5 credit card stocks rank via earnings trends:

Capital One Financial Corp. (NYSE:COF): Current Price $56.99

Fiscal Year	2007	2008	2009	2010	2011
Revenue ($) in millions	19,130	17,860	15,950	19,070	18,520
Diluted EPS ($)	3.97	-0.21	0.74	6.01	6.80

Capital One has been growing earnings, though revenue has remained more-or-less flat on a yearly basis.

Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:

Quarter	Sep. 30, 2011	Dec. 31, 2011	Mar. 31, 2012	Jun. 30, 2012	Sep. 30, 2012
Revenue ($) in millions	4,706	4,569	5,500	5,670	6,390
Diluted EPS ($)	1.77	0.85	2.72	0.16	2.01

But things have been humming along nicely on the quarterly revenue front. Unfortunately, earnings are quite another matter, being highly inconsistent. Not exactly our cup of tea…

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