The coronavirus pandemic has been challenging for publicly-traded companies in the cosmetics industry. Since people are spending less time at work or social gatherings, they haven’t been wearing as much makeup. Even the most well-known cosmetics stocks have increased their advertising to stay afloat in a competitive market. This has affected their margins.
However, the cosmetics industry is considered a consumer staple. This means that demand for these products remains relatively constant, regardless of economic downturns. Makeup and skincare are an integral part of popular culture. In recent years, social media influencers have been a huge boon to this industry.
People have been wearing cosmetics for centuries. Since this is a huge industry, it’s not likely to go anywhere anytime soon. Check out our list of top cosmetics stocks to add to your portfolio for the long haul.
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Best Cosmetics Stocks To Buy
e.l.f. Beauty Inc (NYSE:ELF)
Short for “eyes, lips, face,” e.l.f. Beauty is an American cosmetics brand. The company is based out of California, where they work on the development and sale of multiple product lines. These include skin-care products, eyeliners, lipsticks, glosses, brushes, blushes, bronzers, bath products, mineral-based makeup, and more.
e.l.f.’s products are sold in 19 countries in retail locations such as Walmart, Target, Dollar General, and Kmart. That said, more than half of their sales come from their website, which also doubles as a social networking platform with over 2 million members. The brand holds that their products are 100% cruelty-free and they support PETA’s no-fur campaign.
e.l.f. Beauty launched its IPO in 2016. Right now, their share price is slightly less than it was at that time. However, they recovered very well from the March 2020 market downturn. Their market price has increased by over 50 percent since January of 2020. e.l.f. targets the every-day consumer rather than the luxury consumer, meaning they’ll continue to be a popular brand name in the world of cosmetics (even through the economic downturn).
Natura & Co (NYSE:NTCO)
As a Brazillian company, Natura & Co is personal care and cosmetics group headquartered in Sao Paulo. The group’s brands include Avon, Aesop, The Body Shop, and Natura Cosméticos. Natura sells their products in 73 countries and on every continent except Antarctica.
After their recent acquisition of Avon in 2019, the company became the largest Brazillian cosmetics brand in terms of revenue, and 4th largest cosmetics and beauty pure play in the world. In January of 2020, the company began trading on the NYSE.
Like e.l.f, Natura & Co. currently trades for around the same price that they did at the time of their IPO. Natura launched their IPO in 2018. Their shares currently trade around $17 each. Since the company recently acquired Avon, they have a geographically diverse portfolio that is very exciting for investors.
Nu Skin Enterprises, Inc. (NYSE:NUS)
Nu Skin is an American multilevel marketing company. Their products of focus include personal care products and dietary supplements. More specifically, their brand sells across 54 markets with a total of more than 1.2 million independent distributors. As a multilevel marketing company, the brand has received its fair share of controversy over the years.
At their highest point, they traded for around $137 per share, but now trade for around $58 per share. Amazingly, their stock has completely recovered from their March 2020 losses. They also have an impressive $3 billion market cap despite their controversial MLM narrative.
Since NuSkin gives people an opportunity to work from home, they’ve attracted more business in 2020. This has likely contributed to their growth on the stock market.
Revlon Inc (NYSE:REV)
Revlon is another American cosmetics, personal care, and fragrance company. Established in 1932, Revlon’s headquarters is in New York City. The company has multiple divisions that focus on separate markets. These divisions include their name brand, Elizabeth Arden, Inc., Ultima II, and Britney Spears Fragrance.
Revlon stock is now trading for historically low prices. They launched their IPO in 1996, but have struggled to continue growing, especially as a result of the COVID-19 pandemic. Right now, they trade for roughly $11.50 per share. This could be a good undervalued stock to buy and hold for the future.
Top Cosmetics Stocks
Ulta Beauty, Inc. (NASDAQ:ULTA)
Founded in 1990, Ulta Beauty is an Illinois-based beauty store chain. Ulta Beaty’s stores come equipped with a variety of men’s and women’s cosmetic and skincare brands, fragrance products, beauty tools, salon, brow bar, and Dermalogica skin bar. The company owns nearly 1,200 stores across all 50 states.
Ulta Beauty took a hard hit during the pandemic, but their share prices have recently returned to pre-pandemic levels. Their revenue and earnings per share dropped dramatically during 2020, but have the potential to grow as the economy reopens. Many analysts think Ulta stock is greatly undervalued right now. They are projected to see over 22% revenue growth and triple their current earnings later in 2021.
Estée Lauder Companies Inc (NYSE:EL)
Based in Midtown Manhattan, Estée Lauder is a multinational manufacturer and marketer of prestige skincare and other cosmetics products. Additionally, their portfolio contains over 20 well-known brands including Clinique, MAC Cosmetics, La Mer, Tom Ford Beauty, and more. Their products are sold online and in retail stores around the country.
Estée Lauder has a market cap of $85.57 billion. Despite a small downturn in March of 2020, the company performed very well throughout 2020 and reached all-time highs in December. This is likely a result of their portfolio of well-known brands. Estee Lauder’s diversified portfolio makes them a great long-term investment.
Helen of Troy Limited (NASDAQ:HELE)
Helen of Troy is a designer and developer of a variety of consumer housewares, beauty products, and health & home products. Products under the company’s beauty segment include hair & skincare products, grooming tools, fragrances, deodorants, and more.
Helen of Troy hit all-time highs at the beginning of February 2021. They have recovered very well from last year’s market crash. They make iconic brands in three different market segments. This diversified portfolio makes Helen of Troy a reliable investment even during tough economic times.
Inter Parfums, Inc. (NASDAQ:IPAR)
Inter Parfums is a cosmetic pure play in the fragrances space. Inter Parfums develops, manufactures, and distributes fragrances for many of the largest names in the industry. Their brands include Coach, Abercrombie & Fitch, GUESS, Hollister, Kate Spade, Moncler, and more.
Inter Parfums is a great choice based on many of their blue-chip customers in the fragrance industry. In March, the company fell to its lowest trading price in years and remained there for several months. The company started to see some forward momentum again in November 2020. Now is a great time to buy Inter Parfums as their stock is on the way up.
Cosmetics Penny Stocks
Coty Inc (NYSE:COTY)
Coty is another American multinational beauty brand. Founded in 1904, the company now develops a variety of cosmetics, fragrances, hair care products, and more across a selection of nearly 77 brands. Coty owns or partners with top brands such as Balenciaga, Calvin Klein, Hugo Boss, Dolce and Gabbana, Lacoste, Marc Jacobs, and more.
The company went public in 2013,but they now trade at some of their lowest prices ever. Coty has not yet made a market recovery from the pandemic. However, they purchased a $600 million stake in Kylie Cosmetics in 2019 and a stake in KKW Beauty in 2020. These Kardashian-owned brands mean there’s plenty of room for growth with Coty.
Should You Buy Cosmetics Stocks?
Regardless of whether or not there’s a pandemic, cosmetics are still important to the average consumer. Some cosmetic companies have fared better than others during this period, but investors willing to take a chance on the wellness movement could see fantastic returns in the future. Businesses are also starting to open up again, which means consumers are buying cosmetics in person.
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Cosmetics Stocks: Final Thoughts
Many cosmetics stocks are doing the best they ever have right now. Many other stocks are involved in acquisitions and other growth behaviors that indicate they could perform very well in the future. Americans have considered cosmetics essential despite the quarantine. This industry is likely to remain important for many decades to come.