Which Top Consumer Food & Beverage Stock has the Strongest Earnings Trends: Heinz, Coke, Starbucks or General Mills?

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 4 of the top food and beverage stocks rank via earnings trends:

The Coca-Cola (NYSE:KO): Current Price $37.36

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 31,940 30,990 35,120 46,540 48,020
Diluted EPS ($) 1.245 1.465 2.53 1.845 1.97

Revenue at Coke is up every year after 2009, but EPS has tapered off after 2010. Nevertheless, we see that it improved in the latest year.

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 ($) in millions 11,040 11,140 13,080 12,340 11,460
Diluted EPS ($) 0.355 0.445 0.605 0.50 0.41

Revenue is falling off over the last two quarters and so has EPS. We’ll avoid Coke for this analysis…