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The cosmetics industry makes consumer beauty products such as makeup, lotions, shampoos, perfumes, hair colors, and accessories. Companies in this group include Revlon Inc. (REV), Inter Parfums Inc. (IPAR), and South Korea-based Amorepacific Corp. (090430). Although there is no direct benchmark for the cosmetics industry, these companies are part of the consumer discretionary sector. Cosmetics stocks, as represented by the Consumer Discretionary Select Sector SPDR ETF (XLY), have underperformed the broader market with a total return of -18.0% compared to the S&P 500’s total return of -13.3% over the past 12 months. These market performance numbers and the statistics in the tables below are as of March 19.
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.
- 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. The company announced last week that it was closing all of its stores across the U.S. until at least March 31 in response to the spread of COVID-19, but that customers can still make purchases online.
- Kao Corp.: Kao is a Japan-based manufacturer of household and chemical products, including cosmetics. The company announced a number of changes to its executive leadership team in early December.
- KOSÉ Corp.: KOSÉ is a Japanese firm that manufactures, sells, and exports a variety of cosmetics products including those related to skin care, hair care, and makeup. KOSÉ products are primarily sold throughout Asian markets. The company announced a number of changes to its executive leadership team in February.
Fastest Growing Cosmetics Stocks
These are the cosmetics stocks with the highest year-over-year (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 (%)|
|Kao Corp. (KAOOY)||14.10||33.5||32.9|
|Shiseido Co. Ltd. (SSDOY)||54.45||21.8||27.3|
|Ulta Beauty Inc. (ULTA)||128.52||7.3||8.4|
- Kao Corp.: See above for company description.
- Shiseido Co. Ltd.: Shiseido is a Japan-based manufacturer of cosmetics, toiletries, personal care products, as well as barber and beauty products. The company also offers pharmaceuticals, foodstuffs, and fine chemicals. Shiseido announced a number of changes to its executive leadership team in late December.
- Ulta Beauty Inc.: See above for company description.
Cosmetics Stocks with the Most Momentum
These are the cosmetics stocks that had the highest total return over the last 12 months. Although two of the stocks listed below had negative total returns over the past year, they are the two that have outperformed all other cosmetics stocks with negative total returns.
|Cosmetics Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Beiersdorf AG (BDRFY)||19.73||22.4||3.3|
|The Estée Lauder Companies Inc. (EL)||156.24||56.2||-3.3|
|L’Oreal S.A. (LRLCY)||48.64||135.8||-7.5|
|S&P 500 (SPY)||N/A||N/A||-13.3|
|Consumer Discretionary Select Sector SPDR ETF (XLY)||N/A||N/A||-18.0|
- Beiersdorf AG: Beiersdorf is a Germany-based manufacturer focused on the production of personal care products and cosmetics, such as skin and hair care products, deodorants, and bandages. The company announced last week that it was ramping up production in order to supply its European production network with 500 tons of disinfectant in order to help fight the coronavirus pandemic.
- The Estée Lauder Companies Inc.: Estée Lauder is engaged in the manufacture and marketing of a wide range of skin care, makeup, fragrance, and hair care products. The company announced in December that it had completed its acquisition of South Korea-based Have & Be Co. Ltd., the global skin care company behind Dr. Jart+ and men’s grooming brand Do The Right Thing.
- L’Oreal S.A.: L’Oreal is a France-based manufacturer of cosmetics. The company offers mascara, lip gloss, eyeshadow, nail polish, and a variety of other skin, hair, and body care products.
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