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 fast-food stocks rank via earnings trends:
Yum! Brands, Inc. (NYSE:YUM): Current Price $65.30
|Revenue ($) in millions||11,300||10,840||11,340||12,630||13,630|
|Diluted EPS ($)||1.96||2.22||2.38||2.74||3.38|
The operator of the KFC, Pizza Hut and Taco Bell restaurants certainly has its act together, and we see good annual growth on both the sales and profitability fronts.
Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:
|Quarter||Dec. 31, 2011||Mar. 31, 2012||Jun. 30, 2012||Sep. 30, 2012||Dec. 31, 2012|
|Revenue ($) in millions||4,111||2,743||3,168||3,569||4,153|
|Diluted EPS ($)||0.75||0.96||0.69||1.00||0.72|
Unfortunately, though quarterly sales are growing strongly, EPS has taken a dive in the latest quarter. We’d rather move on from this one…