Five Good-Looking Cosmetic Stocks

All you have to do is thumb through women’s magazines to see that the cosmetics, makeup, and skincare industries are big business. I looked through my wife’s Glamour Magazine and discovered that there were 16 pages of ads, mostly for cosmetics, before you even reached the table of contents.

Here is a list of companies in this industry that are worth taking a gander at. I have excluded the large conglomerates, such as Unilever NV (UN) and Procter & Gamble Co. (PG) to focus more on the purer plays.

Estee Lauder Companies Inc. (EL) has various brands including Lauder, Aramis, Clinique, Prescriptives, Lab Series, Origins, American Beauty, and Good Skin. Its forward P/E is 19 and its PEG is 1.75. It just reported its earnings which showed a year over year quarterly earnings growth of 58%. The yield on the stock is 1.1%.

Avon Products Inc. (AVP) is a well known multilevel marketer of cosmetics, fragrances, skin care, and toiletries, along with various other products. It recently reported that its first-quarter profits nearly tripled. Its P/E is 39, and it has a forward P/E of 20. The PEG is 2.1, and the company pays a yield of 1.9%. The short interest ratio is 2.2, and has dropped by 4.5%.

Revlon Inc. (REV) sells cosmetics, skincare products, perfume, and other personal care products through mass volume retailers, pharmacies, supermarkets, and department stores. It might not be considered a small cap as such [market cap over half a billion dollars] but it sure has a small stock price, selling for less than one and a half dollars per share. Earnings have been negative, and the company has $1.4 billion in debt. Interestingly, the stock is owned by Ron Perelman, Del Mar Asset Management, and EagleRock Capital Management.

L'Oreal Co. ADR (LRLCY.PK), based in Paris, France, is the largest cosmetics company in the world. It has a forward P/E of 23 and a PEG of 2.5. Its ADRs trade on the pink sheets.

Shiseido Co. Ltd. (SSDOY.PK), based in Japan, was founded in 1872 and is the oldest cosmetics company in the world. Its products include Pureness, The Skincare, Benefiance, Bio-Performance, Suncare, and White Lucent. The stock trades on the pink sheets, and unfortunately its difficult to get financial information about it.

Disclosure: The author doesn’t own any of the above.

Comments

[User 239889:]

This is great info!

2008 Aug 07 12:32 PM