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 (NYSE:UN) and Procter & Gamble Co. (NYSE:PG) to focus more on the purer plays.
Estee Lauder Companies Inc. (NYSE: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. (NYSE: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. (NYSE: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 (OTCPK:LRLCY), 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. (OTCPK:SSDOY), 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.