Top Cosmetics Stocks for Q1 2020

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The cosmetics industry makes consumer beauty products such as makeup, lotions, shampoos, perfumes, hair colors, and the accessories and applicators for these and similar products. Some of the companies in the cosmetics space include Revlon, Inc. (REV) and Inter Parfums, Inc. (IPAR). Although there is no direct benchmark for the cosmetics industry, these and other cosmetics stocks are found within the consumer discretionary sector. As such, the Consumer Discretionary Select Sector SPDR ETF (XLY) is a reasonable benchmark. In the trailing 12-month period, XLY posted a price change of 21.2%, somewhat underperforming the S&P, which climbed by 26.6%. All figures are as of January 9, 2020.

Here are the top 3 cosmetics stocks with the best value, the fastest earnings growth, and the most momentum.

Best Value Cosmetics Stocks

These are the cosmetics stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.

Best Value Cosmetics Stocks
  Price ($) Market Cap ($B) 12-Month Trailing P/E Ratio
Ulta Beauty Inc. (ULTA) 263.50 15.1 21.7
Kao Corp. (KAOOY) 16.63 39.7 27.9
KOSE Corp. (KSRYY) 30.84 8.8 29.3
Source: Investopedia
  • Ulta Beauty Inc.: Ulta Beauty is a retailer offering cosmetics, fragrance, skin and hair care products, and salon services. Along with its own private beauty label, it sells around 20,000 products from over 500 beauty brands across all categories, including Kylie Jenner’s Kylie line.
  • Kao Corp.: Japanese manufacturer Kao is focused not only on cosmetics products, but also on a range of other household and chemical products as well. For the 9-month period ending September 30, 2019, Kao reported a 39.5% increase in net cash flows from operating activities year-over-year (YOY).
  • KOSE Corp.: KOSE is a Japanese firm that manufactures, sells, and exports a variety of cosmetics products including those related to skin care, hair care, and makeup. KOSE products are primarily sold throughout Asian markets. In its Q3 2019 report, the company reported that sales rose by 9.8% YOY.

Fastest Growing Cosmetics Stocks

These are the cosmetics stocks with the highest YOY earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders

Fastest Growing Cosmetics Stocks
  Price ($) Market Cap ($B) EPS Growth (%)
e.l.f. Beauty Inc. (ELF) 15.46 0.8 62.5
Kao Corp. (KAOOY) 16.63 39.7 32.9
Shiseido Co. Ltd. (SSDOY) 72.04 28.4 27.3
Source: Investopedia; e.l.f. Beauty, Kao, Shiseido Investor Relations
  • e.l.f. Beauty Inc.: e.l.f. Beauty sells makeup products. Among the company’s most popular lines are eyeliners, lipsticks, and lip care products. For the firm’s most recent quarter, Q2 FY2020, net sales increased by 6% YOY to $67.6 million.
  • Kao Corp.: See company description above.
  • Shiseido Co. Ltd.: Shiseido Co. is a Japanese cosmetics and toiletry product manufacturer. Aside from makeup and skin-care products, the company also produces pharmaceuticals, chemical products, and more.

Cosmetics Stocks with the Most Momentum

These are the cosmetics stocks that had the highest price change the last 12 months.

Cosmetics Stocks with the Most Momentum
  Price ($) Market Cap ($B) 12-Month Trailing Price Change (%)
Avon Products Inc. (AVP) 5.60 2.5 214.6
The Estée Lauder Companies Inc. (EL) 211.96 76.3 65.8
e.l.f. Beauty Inc. (ELF) 15.46 0.8 57.3
S&P 500 (SPY) N/A N/A 26.6
Consumer Discretionary Select Sector SPDR ETF (XLY) N/A N/A 21.2
Source: Investopedia; Yahoo! Finance
  • Avon Products Inc.: A maker of beauty and cosmetics products, Avon Products sells a variety of fragrances, makeup, and accessories. The company also sells home products. As of January 3, 2020, Avon’s stock no longer trades on the New York Stock Exchange as a result of the company’s acquisition by Natura & Co Holding SA.
  • The Estée Lauder Companies Inc.: Beauty care maker Estee Lauder is well-known for its skin care, makeup, hair care, and fragrance products. The company’s Q1 FY2020, ending on September 30, 2019, brought net sales of $3.9 billion, an increase of 11% YOY.
  • e.l.f. Beauty Inc.: See company description above.

Source: Investopedia

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