Which Credit Card 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 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…