10 Year Earnings History

The 10 Year Earnings Per Share should be rising. A rising Earnings Per Share is an indicator of a company with a Durable Competitive Advantage. The rise doesn't have to be smooth. As long as the recent year's earnings is significantly higher than it was 10 year ago, then we are interested in this company's stock.

When the 10 Year Earnings Per Share is flat or erratic, going through periods of profit losses, it would mean the company is in a very competitive industry. It could also mean the company does not have the Durable Competitive Advantage we are looking for.

 

Example 1: Coca-Cola's Rising Earnings

Date: January 2015
Company: Coca-Cola

Coca-Cola's Earnings Per Share has risen from $1.00 to $1.90 per share over the last ten years. The rise may not be smooth but what's important is that it is rising.

Coca-Cola's 10 Year Earnings History
Source: MSN Money

 

Example 2: IBM's Rising Earnings

Date: January 2015
Company: IBM

IBM's Earnings Per Share has risen from $4.38 to $14.94 per share over the last ten years. In this example it is rising smoothly.

IBM's 10 Year Earnings History
Source: MSN Money

 

Example 3: Ford's Erratic Earnings

Date: January 2015
Company: Ford

Ford's Earnings Per Share is erratic. Over the last ten years the company lost money from the years 2006 to 2008. This is an indicator of a price competitive industry.

Ford's 10 Year Earnings History
Source: MSN Money

 

Example 4: Best Buy's Flat Earnings

Date: January 2015
Company: Best Buy

Best Buy's Earnings Per Share is flat. It didn't change much from $1.41 to 1.53 in ten years. The company lost money in the year 2012. This is also indicator of a price competitive industry.

Best Buy's 10 Year Earnings History
Source: MSN Money

 

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