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 either the consumer discretionary or the consumer staples sectors. The benchmark Consumer Discretionary Select Sector SPDR ETF (XLY) has outperformed the broader market, posting a trailing 1-year total return of 31.2%. By contrast, the Consumer Staples Sector SPDR ETF (XLP) has underperformed with total return of 10.5%. The Russell 1000's total return is 21.8% over the same period. These market performance numbers are as of December 7 and the statistics in the tables below are as of December 8, 2020.
Here are the top 3 cosmetics stocks with the best value, fastest 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)||14.92||35.9||29.7|
|Beiersdorf AG (BDRFY)||22.30||25.3||38.5|
|Ulta Beauty Inc. (ULTA)||273.26||15.4||69.0|
- 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.
- 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 Q3 2020, Beiersdorf reported an 8.5% year-over-year (YOY) decline in sales, while the company's dermocosmetics brands EUCERIN and AQUAPHOR saw sales surge. Dermocosmetics brands combine cosmetics and dermatology.
- Ulta Beauty Inc.: Ulta Beauty operates a chain of beauty stores throughout the U.S. The company sells cosmetics, skin and hair care products, fragrances, and salon services. During Q3 FY 2020 ended October 31, Ulta reported that net sales decreased by 7.8% YOY and net income fell by 42.3% over the same period. Due to the economic disruption caused by COVID-19, the company withdrew FY 2020 guidance in March and did not provided an earnings outlook in its most recently quarterly update.
Cosmetics Stocks With the Most Profit Growth or Least Profit Decline
These are the cosmetics stocks with the highest year-over-year (YOY) earnings per share (EPS) growth or lowest EPS decline 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.
|Cosmetics Stocks with the Most Profit Growth or Least Profit Decline|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Coty Inc. (COTY)||7.45||5.7||242.9|
|The Estée Lauder Companies Inc. (EL)||245.76||88.9||-11.8|
|Kao Corp. (KAOOY)||14.92||35.6||-22.8|
- Coty Inc.: Coty makes and distributes fragrances, hygiene products, sun care products, skin treatments, and color cosmetics. It markets its products to department stores, specialty and mass-market retailers, and duty free shops in airports around the world. On December 9, the company announced the appointment of Laurent Mercier to CFO. Mercier, who was previously deputy CFO, succeeds Pierre-André Terisse.
- 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.
- 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)||22.26||1.1||45.9|
|The Estée Lauder Companies Inc. (EL)||245.76||88.9||25.0|
|Ulta Beauty Inc. (ULTA)||273.26||15.4||4.2|
|Consumer Discretionary Select Sector SPDR ETF (XLY)||N/A||N/A||31.2|
|Consumer Staples Sector SPDR ETF (XLP)||N/A||N/A||10.5|
- e.l.f. Beauty Inc.: e.l.f. Beauty provides mainly low-priced cosmetics products for the eyes, lips, and face. In November, e.l.f. announced that it was partnering with a popular female video gaming star named Loserfruit (Kathleen Belsten). Loserfruit has more than 8 million followers worldwide. Through the partnership, Loserfruit will promote e.l.f. products to potential Gen Z customers across social platforms including Twitch, TikTok, and YouTube. In a recent survey by e.l.f. Cosmetics, over 70% of e.l.f. fans said they play video games, and 65% said they like to watch gamers play on platforms like Twitch and YouTube. Financial details related to the sponsorship were not disclosed.
- The Estée Lauder Companies Inc.: See company description above.
- Ulta Beauty Inc.: See company description above.
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YCharts. "YCharts." Accessed Dec. 9, 2020.
Beiersdorf AG. "Beiersdorf: Significant improvement in the third quarter." Accessed Dec. 9, 2020.
Ulta Beauty Inc. "Ulta Beauty Announces Third Quarter Fiscal 2020 Results." Accessed Dec. 9, 2020.
Coty Inc. "Coty Promotes Laurent Mercier to Chief Financial Officer." Accessed Dec. 9, 2020.
e.l.f. Beauty Inc. "e.l.f. Cosmetics Teams Up with Loserfruit, One of the Biggest Female Gamers, to Connect with a New Generation of Fans." Accessed Dec. 9, 2020.