Which of These 5 Utility 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’).

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Here’s your Cheat Sheet to how the top 5 utility stocks rank via earnings trends:

The AES (NYSE:AES): Current Price $11.93

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 15,200 13,110 15,440 16,920 18,140
Diluted EPS ($) 1.82 0.98 0.01 0.07 -1.21

AES reported strong growth in turnover, helped no doubt by its 2011 acquisition of DPL Inc, but profits have switched off in 2012…

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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 ($) in millions 4,025 4,740 4,192 4,587 4,622
Diluted EPS ($) -0.26 0.44 0.18 -2.10 0.27

AES managed to report a positive EPS in the latest quarter, though earnings are rather volatile. We’ll keep this company under consideration…