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’).

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 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…

HJ Heinz Co. (NYSE:HNZ): Current Price $72.51

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 9,886 10,010 10,490 10,710 11,650
Diluted EPS ($) 2.65 2.89 2.71 3.06 2.85

Revenue is up nice and steady every year, but we’re concerned that EPS in 2012 turned down a bit…

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

Quarter Oct. 31, 2011 Jan. 31, 2012 Apr. 30, 2012 Jul. 31, 2012 Oct. 31, 2012
Revenue ($) in millions 2,814 2,918 3,084 2,791 2,827
Diluted EPS ($) 0.73 0.88 0.54 0.80 0.90

Essentially, revenue has not grown between Oct 2011 and October 2012. We’re encouraged to see the steady improvement in EPS in the latest two quarters and keep Heinz on the list…

Starbucks Corp. (NASDAQ:SBUX): Current Price $55.56

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 10,380 9,775 10,710 11,700 13,300
Diluted EPS ($) 0.43 0.52 1.24 1.62 1.79

Starbucks really went full throttle after 2009 and there’s excellent growth on the topline and EPS.

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 ($) in millions 3,436 3,196 3,304 3,364 3,800
Diluted EPS ($) 0.50 0.40 0.43 0.46 0.57

Revenue and EPS is improving at a nice clip on the quarterly numbers, too. This coffee chain certainly makes the grade…

General Mills Inc. (NYSE:GIS): Current Price $43.94

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 13,650 14,560 14,640 14,880 16,660
Diluted EPS ($) 1.85 1.90 2.24 2.70 2.35

The EPS decline in 2012 is the only blot on an otherwise great set of annual numbers from General Mills.

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 ($) in millions 4,624 4,120 4,066 4,051 4,882
Diluted EPS ($) 0.67 0.58 0.49 0.82 0.82

Unfortunately, EPS stayed flat in the latest quarter and we have to drop this company from the reckoning…

Conclusion

Starbucks has the better revenue and earnings momentum compared to Heinz, as well as slightly better annual numbers, and therefore wins this round of  the ”E-Squared” investment analysis of top consumer food and beverage stocks.

“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!