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 in the last year. They posted a total return of 21.3% compared to the Russell 1000's total return of 15.2% over the past 12 months. These market performance numbers are as of September 14 and the statistics in the tables below are as of September 15, 2020.
Here are the top 3 cosmetics stocks with the best value, the lowest profit decline, 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)||15.36||36.9||28.2|
|KOSÉ Corp. (KSRYY)||23.82||6.8||36.9|
|Beiersdorf AG (BDRFY)||23.23||26.4||40.1|
- Kao Corp.: Kao is a Japan-based manufacturer of household and chemical products, including cosmetics. Kao's cosmetics segment produces skin care products, such as makeup soaps, facial cleansers and whole-body cleaners, and also hair care products, including shampoos.
- KOSÉ Corp.: KOSÉ is a Japanese company that manufactures, sells, and exports a variety of cosmetics products, including for skin care, hair care, and makeup. KOSÉ products are primarily sold in Asian.
- Beiersdorf AG: Beiersdorf is a Germany-based company focused on personal care products and cosmetics, such as skin and hair care, deodorants, and bandages. For H1 2020, Beiersdorf reported year-over-year (YOY) a 10.7% decline in organic sales, along with falling earnings and profit margins, in the midst of the COVID-19 pandemic. However, the company experienced strong growth in skin care products and also dermocosmetics products, the latter which combine ingredients that aid both health and beauty.
Cosmetics Stocks With the Least Profit Decline
These are the cosmetics stocks with the least YOY earnings per share (EPS) declines for the most recent quarter. A company’s ability to maintain profitability in a difficult business environment can be a sign of good management and/or a strong business model. No cosmetics stocks in our screen had profit growth, which reflects weaker demand related to the steep and sudden global recession sparked by the COVID-19 pandemic.
|Cosmetics Stocks with the Least Profit Decline|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Kao Corp. (KAOOY)||15.36||36.9||-20.2|
|e.l.f. Beauty Inc. (ELF)||18.12||0.9||-57.1|
|KOSÉ Corp. (KSRYY)||23.82||6.8||-80.7|
- Kao Corp.: See above for company description.
- e.l.f. Beauty Inc.: e.l.f. Beauty provides mainly low-priced cosmetics products for the eyes, lips, and face. On August 5, the company reported plunging earnings even as net sales rose 8% YOY in Q1 FY 2021. COVID-19 hurt its operations in the U.S. and other international locations.
- KOSÉ 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 (%)|
|L'Oréal S.A. (LRLCY)||66.70||186.6||25.0|
|e.l.f. Beauty Inc. (ELF)||18.12||0.9||15.1|
|The Estée Lauder Companies Inc. (EL)||217.41||78.4||12.4|
|Consumer Discretionary Select Sector SPDR ETF (XLY)||N/A||N/A||21.3|
- 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 skin, hair, and body care products.
- e.l.f. Beauty Inc.: See above for company description.
- 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 on August 20 reported that full-year 2020 net income and sales fell for the year ending June 30, 2020, largely due to major "disruption" from the COVID-19 pandemic. For the company's fiscal Q4, ended June 30, it reported a 32% decrease in net sales YOY, with a net loss of $0.5 billion for the quarter.
YCharts. "YCharts." Accessed Sept. 16, 2020.
Beiersdorf AG. "Beiersdorf outperforms declining skin care market in the first half of 2020." Accessed Sept. 16, 2020.
e.l.f. Beauty, Inc. "e.l.f. Beauty Announces First Quarter Fiscal 2021 Results." Accessed Sept. 16, 2020.
Estée Lauder Companies. "THE ESTÉE LAUDER COMPANIES REPORTS FISCAL 2020 RESULTS," Pages 1, 2, and 9. Accessed Sept. 16, 2020.