Which Alcoholic Beverage 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 4 alcoholic beverage stocks rank via earnings trends:

BEAM Inc (NYSE:BEAM): Current Price $60.95

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 7,609 1,980 2,095 2,311 2,466
Diluted EPS ($) 2.02 1.60 3.16 5.78 2.38

The financial crisis took a severe toll on Beam’s numbers in 2009, but things have certainly turned around since then. Though revenue in 2011 is just about a quarter that of 2007, EPS is up 18% in that 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 ($) in millions 637.50 533.80 595.50 627.50 709.10
Diluted EPS ($) 0.50 0.49 0.62 0.47 0.79

BEAM has shown rising sales for the last three quarters but EPS has only risen the past three. This stock passes our quarter-over-quarter earnings growth test, but keep an eye on consistency…

Constellation Brands Inc. (NYSE:STZ): Current Price $32.68

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 3,773 3,655 3,365 3,332 2,654
Diluted EPS ($) -2.80 -1.38 0.41 2.36 1.92

Annual revenue at Constellation is obviously under pressure. EPS in 2012 has fallen off sharply from 2011…

Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:

Quarter Nov. 30, 2011 Feb. 29, 2012 May. 31, 2012 Aug. 31, 2012 Nov. 30, 2012
Revenue ($) in millions 700.70 628.10 634.80 698.50 766.90
Diluted EPS ($) 0.46 0.46 0.34 0.60 0.51

The company is improving sales nicely over the last three quarters. However EPS has fallen off in November. We’ll look elsewhere…

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Anheuser-Busch InBev (NYSE:BUD): Current Price $92.28

Fiscal Year 2007 2008 2009 2010 2011
Revenue ($) in millions 19,740 23,510 36,760 36,300 39,050
Diluted EPS ($) 3.06 1.93 2.90 2.50 3.63

BUD has impressed with its revenue and EPS growth in 2011. We note that revenue in 2011 is almost double that of 2007, though EPS has not grown at the same pace…

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
Revenue ($) in millions 9,874 9,332 9,871 10,270
Diluted EPS ($)  1.21  1.05  1.22  1.17

BUD earnings are a yo-yo. The company has spent a ton of time making strategic acquisitions, so we’ll wait to see if those investments pay off…

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Molson Coors Brewing (NYSE:TAP): Current Price $45.37

Fiscal Year 2007 2008 2009 2010 2011
Revenue ($) in millions 6,191 4,774 3,032 3,254 3,516
Diluted EPS ($) 2.71 2.04 3.87 3.78 3.63

Annual revenue at Molson’s has shown a rising trend after 2009, though EPS is sliding…

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 ($) in millions 954.40 937.30 691.40 999.40 1,196
Diluted EPS ($) 1.06 0.95 0.44 0.57 1.09

Molson’s acquisition of European brewer StarBev is reflecting in impressive growth in revenue and EPS after the March 2012 quarter.

Conclusion

It is easy to award Molson’s the cup in our “E-Squared” investment analysis for its impressive earnings show quarter-over-quarter.

“E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our successful CHEAT SHEET investing framework. Don’t waste another minute – click here to discover our CHEAT SHEET stock picks now!