Which Mega-Bank 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 mega-bank stocks rank via earnings trends:

The Goldman Sachs Group, Inc. (NYSE:GS): Current Price $144.45

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 53,580 51,670 45,970 36,790 41,660
Diluted EPS ($) 4.47 22.13 13.18 4.51 14.13

Goldman Sachs has rather volatile numbers on revenue and earnings during these past five years.

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 ($) in millions 8,016 11,800 8,592 10,140 11,130
Diluted EPS ($) 1.94 3.92 1.78 2.85 5.60

The picture from the last three quarters, however, is pretty rosy. EPS numbers have leapt up and revenue has also grown nicely. We’ll keep our lens on this one for now…