Interested in adding cosmetics stocks to your portfolio? This consumer staple tends to do well in down markets, but shifting shopping trends may trigger volatility within the industry.
What are makeup stocks?
Makeup stocks are stocks from cosmetics and consumer beauty companies that produce makeup, perfume, skincare products, hair care products and toiletries.
Investing in makeup stocks can be complicated, as most drugstore brands are owned by a parent company. In fact, nearly 200 makeup brands fall under the ownership umbrella of only 8 companies.
For example, Aveda, Clinique and M.A.C.? Those belong to Estée Lauder. And Lancôme and Maybelline? Those are owned by L’Oréal.
There aren’t many cosmetic stocks that trade on Canadian stock exchanges, but there are some that trade on US exchanges. However, investors interested in this subcategory of the consumer staples sector should also prepare to invest in brands outside North America, too, like the Japanese personal care company, Kosé, or German skincare brand, Biofrontera.
Why invest in makeup stocks?
Believe it or not, the beauty and cosmetics industry is considered a consumer staple, which means the products it manufactures tend to be in consistent demand, even in a down market.
With self-care trending on social media and beauty vloggers racking up the views, makeup has become more than a way to enhance our appearance — it’s an artistic medium. And research has discovered that those who use cosmetics aren’t willing to decrease what they spend on beauty products, even with less disposable income on hand.
The cosmetics industry has staying power — makeup has existed for hundreds of years and if recent market trends are anything to judge by, the industry isn’t going anywhere.
The global cosmetics industry is expected to hit USD $429.8 billion by 2022, with a forecasted compound annual growth rate of 4.3% from 2016 to 2022, according to Allied Market Research. And rising trends in natural and cruelty-free ingredients is paving the way for market newcomers — like organic makeup companies — to expand.
This multibillion-dollar global industry continues to grow and may stand as a diversifying stock to balance your portfolio in times of economic downturn.
Risks of investing in makeup
No industry is immune to volatility — even those in the consumer staples sector. The rise of e-commerce and prevalence of social media has begun to convert in-person browsers to online shoppers. And the cosmetics industry is responding.
Smaller, independent names, like e.l.f. and Ulta, are increasingly challenging legacy brands like L’Oréal and Estée Lauder. And with the rising rates of online shopping, older brands that relied on the in-person rep or makeup artist to clinch the sale are scrambling for footing.
Before you invest, review the historical performance of the makeup stock you’re interested in. Is it on an upward trajectory? Leveling out? Losing ground? Newer brands are more of a gamble but may have the agility to outmaneuver the legacy brands.
Makeup stocks
To purchase makeup stocks, prepare to invest in Canadian, US and international companies.
Apollo Healthcare Corp. (TSX: AHC)
MAV Beauty Brands Inc. (OTC Markets, Pink Sheets: MAVBF)
LVMH Moët Hennessy – Louis Vuitton, Société Européenne (OTC Markets, Pink Sheets: LVMUY)
The Estée Lauder Companies Inc. (NYSE: EL)
L’Oréal S.A. (OTC Markets, Pink Sheets: LRLCF)
Coty Inc. (NYSE: COTY)
Johnson & Johnson (NYSE: JNJ)
Shiseido Company, Limited (TYO: 4911)
Revlon, Inc. (NYSE: REV)
KOSÉ Corporation (TYO: 4922)
Compare trading platforms
To invest in makeup stocks, you need a brokerage account. Review platform features and fees to find the account that best fits your needs.
1 - 6 of 6
Finder Score for stock trading platforms
To make comparing even easier we came up with the Finder Score. Trading costs, account fees and features across 10+ stock trading platforms and apps are all weighted and scaled to produce a score out of 10. The higher the score the better the platform - simple.
Makeup stocks may offer portfolio diversification during times of economic downturn. But no industry or investment is risk-free, and emerging shopping trends may trigger competition within the industry.
Review your brokerage account options across multiple platforms to find the account that best meets your needs.
Frequently asked questions
Yes. Some that do include Beiersdorf, Coty and The Estée Lauder Companies.
These two sectors refer to the same thing. Consumer staples are considered defensive because they remain relatively stable in all economic climates.
Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.
Shannon Terrell is a lead writer and spokesperson at NerdWallet and a former editor at Finder, specializing in personal finance. Her writing and analysis on investing and banking has been featured in Bloomberg, Global News, Yahoo Finance, GoBankingRates and Black Enterprise. She holds a bachelor’s degree in communications and English literature from the University of Toronto Mississauga. See full bio
's expertise
has written 42 Finder guides across topics including:
Stacie Hurst is an editor at Finder, specializing in loans, banking, investing and money transfers. She has a Bachelor of Arts in Psychology and Writing, and she has completed FP Canada Institute's Financial Management Course. Before working in the publishing industry, Stacie completed one year of law school in the United States. When not working, she can usually be found watching K-dramas or playing games with her friends and family. See full bio
How likely would you be to recommend Finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Advertiser disclosure
Finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which Finder receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. Finder compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
