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 outperformed the broader market. They posted a total return of 16.1% compared to the S&P 500's total return of 14.0% over the past 12 months. These market performance numbers and the statistics in the tables below are as of June 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
Kao Corp. (KAOOY) 16.20 39.0 28.5
KOSÉ Corp. (KSRYY) 26.91 7.7 28.8
Beiersdorf AG (BDRFY) 22.37 25.4 31.6

Source: YCharts

  • Kao Corp.: Kao is a Japan-based manufacturer of household and chemical products, including cosmetics. In Q1 FY 2020, net sales fell 2.6% year-over-year (YOY).
  • 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.
  • 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. For Q1 FY 2020, Beiersdorf saw organic sales decline by 3.6% 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. Only one cosmetics stock in our screen had profit growth, which reflects the steep and sudden global recession sparked by the COVID-19 pandemic.

Fastest Growing Cosmetics Stocks

 

Price ($) Market Cap ($B) EPS Growth (%)
Kao Corp. (KAOOY) 16.20 39.0 3.2

Source: YCharts

  • Kao Corp.: 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.

Cosmetics Stocks with the Most Momentum

 

Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
e.l.f. Beauty Inc. (ELF) 18.71 0.9 57.1
The Estée Lauder Companies Inc. (EL)   204.84 73.7 16.7
L'Oréal S.A. (LRLCY) 60.18 168.3 8.7
S&P 500 (SPY) N/A N/A 14.0
Consumer Discretionary Select Sector SPDR ETF (XLY) N/A N/A 16.1

Source: YCharts

  • e.l.f. Beauty Inc.: e.l.f. Beauty provides cosmetics products for eyes, lips, and face primarily at a low price point. In June, e.l.f. Beauty announced the launch of a new line of products infused with CBD oil.
  • 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.
  • L'Oréal S.A.: L'Oréal 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. The company reported a 4.8% drop in sales for Q1 FY 2020.