Makeup stocks come from the cosmetics and consumer beauty companies making perfumes, makeup, and skincare and hair care products. The beauty industry has remained resilient despite the increasing inflation, and the reason is the consumers who buy these products to look, smell, and feel better. Plus, the market data also indicates a rise in cosmetics demand. So, investing in makeup stocks now will be a great way to diversify your income.
But selecting and investing in the best makeup stocks can be difficult especially for the newbies. Therefore, we have compiled a list of the best cosmetic stocks. So, you can look over them all and choose the one to invest in!
Best Makeup Stocks To Buy
If you are interested in investing in makeup stocks, find below the top cosmetic stocks to buy in 2024:
Estee Lauder
The company started working in New York in 1946 and has greatly evolved. Therefore, Estee Lauder has become an industry powerhouse with several attractive brands. More than 28000 employees are working with Estee Lauder, and the company generates an annual turnover of $7 billion. Plus, within the last decade, its stock has increased more than 500%. La Mer, Aveda, and Bumble and Bumble are a few of the Estee Lauder’s brands. The company has gained popularity for its skincare products.
For the fiscal year ending in 2021 (June), the company declared that their revenue growth has increased up to 13.4% as compared to the last year. More than half of this revenue came from skincare products. The company is selling its products in 150 countries. The company has also shown remarkable growth in Asian countries, where the total revenue increased by more than 50% compared to the past years. Estee Lauder has grown tremendously in China, contributing up to 36% of its sales.
L’Oreal
It is a French-based company with the highest turnover in the cosmetics sector around the globe. L'Oreal is specialized in skincare products, hair coloring, and makeup. It has acquired several companies, including the Carita, IT Cosmetics, and Décléor. The company has been aggressively investing in e-commerce and has gained shares quickly in the cosmetic industry. It has also introduced tech tools, including the virtual try-on.
According to L'Oreal, the company's online sales increased up to 40% and now makeup 22% of the total market. Also, 27% of the total revenue of L'Oreal comes from e-commerce. During the first half of 2021, the company's sales climbed to 21%, and the operating margin improved from 18% to 19.7%. The wide margin clearly shows the diversification and strength of the company’s business. The company's popularity in Europe, Asia, and North America also shows that the company is a global leader which cannot be easily surpassed.
Ulta Beauty
The company runs a chain of beauty stores throughout America and sells cosmetics, fragrances, and hair and skin care products. The company also owns the hair salons, bringing massive traffic into the stores. Not only that, the company also offers unique investment opportunities in cosmetic stocks. The company has shown comparable sales growth in the past few years, and the stock has remained the winner over the past decade. Ultra Beauty has also signed a deal with Target to open 100 stores inside the Target locations in the coming years. It will provide another great for growth for the company. Considering the company's unique business model, it is expected to show tremendous growth in the coming years.
Coty
The company started the beauty business in 2015 and now offers color cosmetics, fragrances, and body and skincare products. But, its main business is represented by perfumes, which make up 65% of the company's total turnover. Coty sells its products in more than 130 countries and plans to double its skincare sales to $600 million by FY 2025. The company has also expanded its existing products and launched several new ones. Besides that, the company owns more than 80 brands, including Calvin Klein, Hugo Boss, Cover Girl, and Chloé.
Interparfums
Though the company focuses on fragrances, Interparfums also manufactures cosmetic products for different brands, including the Moncler, Oscar de la Renta, and Coach. The company's revenue has increased to 25%, and operating income has doubled to $44.7 million. Interparfums has signed the deal to make the fragrances for ten years under the Ferragamo name and is trying to add more products to help the Interparfums grow further. The partnership with strong brands gives a competitive advantage to Interparfums, and its focus on the small subsectors of cosmetics makes this company unique in cosmetics stocks.
Why Invest In Makeup Stocks?
The beauty and cosmetic industry is a consumer staple, meaning its products will remain in consistent demand in the coming years, even in the down market. With the new self-care trends, makeup has become more than a way to enhance your appearance. The research has revealed that those who are consuming cosmetics will not cut down their spending on beauty products even though they have less disposable income. The industry has staying power and has existed for hundreds of years. If you look over the current market trends, remember the industry is not going anywhere.
The global cosmetic industry will hit $429.8 billion in 2022. Also, the rising trends of natural and cruelty-free ingredients will open new ways for newcomers, and organic makeup companies will expand. So, saying that this multibillion-dollar global industry will continue to grow and stand out as a diversifying stock to balance the investors' portfolio during the economic downturn will not be wrong.
Conclusion:
Beauty products may look like the need of the present day, but the fact is that men have been using these products to moisturize their skin and improve their appearance since ancient Egypt. Over time, cosmetics have become a big business, and due to fast-growing demand, the cosmetics industry has also become an appealing space for investors. If you are also considering investing in makeup stocks, invest in Estee Lauder, L’Oreal, Ulta Beauty, Interparfums, or Coty.
