Which Top 5 Insurance 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 these top 5 insurance stocks rank via earnings trends:

American International Group, Inc. (NYSE:AIG): Current Price $38.45

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions -6,840 75,450 72,830 59,810 65,660
Diluted EPS ($) -756.85 -90.48 14.98 11.01 2.04

AIG certainly weathered the financial storm as EPS moved solidly into the black in 2010. Unfortunately, EPS has been the declining alarmingly since then.

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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 ($) in millions 12,970 18,440 17,120 17,650 12,440
Diluted EPS ($) 11.80 1.71 1.33 1.13 -2.13

The last quarter in December 2012 shows a huge decline in the topline as well as EPS. We’ll keep our distance from this stockā€¦