Tuesday, August 22, 2023

Healthy Chocolate May Help Chocolate Stocks


 by Fred Fuld III

The demand for chocolate is currently on the rise. The global chocolate market is projected to grow at a CAGR of 4.98% from 2022 to 2029, reaching an estimated value of USD 67.88 billion by 2029.

There are a number of factors driving the growth of the chocolate market, including:

Increasing population growth and urbanization. The global population is expected to grow to 9.7 billion by 2050, and the majority of this growth will occur in urban areas. This will create a larger market for chocolate, as urban consumers are more likely to consume chocolate than rural consumers.

Rising incomes. As incomes rise, consumers are more likely to spend money on luxury goods, such as chocolate. This is especially true in developing countries, where the middle class is growing rapidly.

Increased awareness of the health benefits of chocolate. Chocolate has been shown to have a number of health benefits, such as reducing the risk of heart disease, stroke, and diabetes. This is leading to increased demand for chocolate, especially among health-conscious consumers.

Growing popularity of premium and dark chocolate. Premium and dark chocolate are becoming increasingly popular, as consumers are looking for more sophisticated and flavorful chocolate options. This is driving growth in the chocolate market, as these types of chocolate typically command a higher price than traditional milk chocolate.

Chocolate has been shown to have a number of health benefits, including:

Reduced risk of heart disease. The flavanols in chocolate can help to improve blood flow and reduce inflammation, which can help to protect against heart disease.

Lowered blood pressure. The flavanols in chocolate can also help to lower blood pressure, which is another risk factor for heart disease.

Reduced risk of stroke. Chocolate has been shown to reduce the risk of stroke, especially in women.

Improved blood sugar control. The flavanols in chocolate can help to improve insulin sensitivity, which can help to control blood sugar levels.

Reduced risk of type 2 diabetes. Chocolate has been shown to reduce the risk of type 2 diabetes, especially in women.

Improved cognitive function. The flavanols in chocolate can help to improve cognitive function, such as memory and attention.

Reduced risk of Alzheimer's disease and dementia. The flavanols in chocolate may help to protect against Alzheimer's disease and dementia.

Improved mood. Chocolate can help to improve mood, possibly due to its effects on the brain's serotonin levels.

Antioxidant protection. Chocolate is a good source of antioxidants, which can help to protect cells from damage.

It is important to note that these health benefits are only seen with dark chocolate, which contains a higher concentration of flavanols than milk chocolate. Additionally, the benefits are seen when chocolate is eaten in moderation.

So what chocolate stocks are available to investors?

Hershey Foods Corporation (HSY), commonly known as Hershey’s, is a well-known American chocolate company. Hershey’s was founded by Milton S. Hershey in 1894 in the town of Hershey, Pennsylvania, USA. Milton Hershey had previous experience in the caramel business but turned his attention to chocolate manufacturing.

In 1900, Hershey’s introduced its iconic product, the Hershey’s Milk Chocolate Bar, which quickly became popular among consumers. The company’s success was largely attributed to its use of fresh milk and other high-quality ingredients.
Hershey’s experienced significant expansion throughout the early 20th century. 

Milton Hershey established a model town called Hershey, Pennsylvania, to house the company’s employees and their families. The town included amenities such as housing, schools, recreational facilities, and a theme park called Hersheypark.
During World War II, Hershey’s was commissioned by the U.S. government to produce ration bars for the military. These bars provided soldiers with a high-calorie and nutritious food source during combat.

In addition to the classic chocolate bars, Hershey’s expanded its product line to include various confectionery items. This included the introduction of Hershey’s Kisses in 1907, Reese’s Peanut Butter Cups in 1928, and Kit Kat bars in the United States in 1970 through a licensing agreement with Nestlé.

Hershey’s expanded its reach globally, establishing manufacturing facilities and acquiring confectionery companies in different countries. Today, Hershey’s products are available in various regions around the world.

Over the years, Hershey Foods Corporation has grown to become one of the largest chocolate and confectionery manufacturers in the United States and has built a strong brand recognized globally.

Hershey has a trailing price to earnings ratio of 32 and a forward P/E ratio of 25. Earnings per share growth for this year jumped by 44.6%. The stock pays a dividend of $4.14 per year, giving a yield of 1.59%.

Mondelez International (MDLZ) has a rich history in the chocolate industry. The company traces its roots back to 1903 when it was originally established as the National Biscuit Company [NBC] in the United States. NBC quickly gained recognition for its popular snack products, including cookies and crackers. Over the years, NBC expanded its product portfolio and became a leading player in the global food and beverage industry.

In 1923, NBC introduced its first chocolate product, the iconic Oreo cookie, which went on to become one of the company’s most beloved and successful brands. This marked NBC’s entry into the chocolate segment and set the stage for its future endeavors in the chocolate industry.

In 1969, NBC merged with another prominent food company, Kraft Foods, forming the conglomerate known as Kraft General Foods (KGF). This merger brought together two industry giants and further solidified their presence in the chocolate and snack market.

In 2000, KGF underwent a significant restructuring and rebranding. The company spun off its international snack and confectionery businesses, including its chocolate brands, into a separate entity called Kraft Foods Inc. This move aimed to enhance focus and drive growth in the respective product categories.

In 2012, Kraft Foods Inc. made another transformational change. It split into two independent companies: Kraft Foods Group, which focused on the North American grocery business, and Mondelez International, which took charge of the global snacks and confectionery portfolio, including its chocolate brands.

As a result, Mondelez International became a standalone company dedicated to delighting consumers with a wide range of chocolate products. The company’s chocolate portfolio includes well-known brands such as Cadbury, Milka, Toblerone, and Côte d’Or, among others.

This $100 billion market cap company trades at 26 times trailing earnings and 21 times forward earnings. Quarterly earnings growth year-over-year jumped 147.8% on a rise of 18.1% increase in quarterly sales over the same period. The stock pays a dividend yield of 2.09%.

Tootsie Roll Industries has a storied history in the chocolate industry, dating back to its inception in 1896. The company was founded by Leo Hirshfield, who initially started his confectionery business in New York City. While Tootsie Roll Industries is best known for its namesake candy, the Tootsie Roll, its involvement in the chocolate sector is significant.

In the early years, Tootsie Roll Industries primarily focused on producing hard candies. However, in 1907, the company introduced a breakthrough product that would shape its future—the Tootsie Roll. This chocolate-flavored taffy-like candy became an instant success, winning the hearts of consumers across the United States.

Building on the triumph of the Tootsie Roll, the company expanded its chocolate offerings with the introduction of Tootsie Pops in 1931. These lollipops, featuring a chewy Tootsie Roll center, quickly became a beloved treat and a staple of Tootsie Roll Industries’ product lineup.

Over the decades, Tootsie Roll Industries continued to innovate and expand its chocolate portfolio. In 1971, they introduced another iconic product, the Junior Mints. These creamy, chocolate-covered mints gained popularity and have remained a favorite movie theater snack ever since.

Tootsie Roll Industries further expanded its chocolate offerings through acquisitions. In 1993, the company acquired the Charms Company, known for its popular Charms Blow Pops, which combined fruit-flavored hard candy with a gum center. This acquisition strengthened Tootsie Roll Industries’ presence in the chocolate and confectionery market.

Today, Tootsie Roll Industries is a leading player in the chocolate and confectionery industry. In addition to the classic Tootsie Roll and Tootsie Pops, the company offers a diverse range of chocolate-based candies, including Dots, Andes, and Caramel Apple Pops, among others.

This $2.68 billion market cap stock trades at 34 times trailing earnings. Quarterly sales were up 15.3% over the same period last year, and earnings increase 12.8% over the same period. The company offers a yield of 0.97%.

The Rocky Mountain Chocolate Factory is a confectionery company founded in 1981 by Frank and Rosalie Crail in Durango, Colorado. Starting with their first store in an old house, they offered a variety of chocolates and confections. As their high-quality chocolates gained popularity, the company expanded rapidly and began opening franchise locations across the United States.

Rocky Mountain Chocolate Factory became known for its diverse range of chocolate products, including caramel apples, fudge, truffles, nut clusters, and chocolate-covered treats. They also introduced innovative creations like gourmet popcorn, chocolate-dipped strawberries, and custom gift baskets.

To further expand, Rocky Mountain Chocolate Factory adopted a franchise model, allowing individuals to open their own stores under the brand’s umbrella. This approach contributed to the company’s rapid growth and the establishment of numerous retail locations nationwide.

In addition to its success in the United States, Rocky Mountain Chocolate Factory ventured into international markets. It opened stores in Canada, the United Arab Emirates, South Korea, Japan, and other countries, expanding its reach and introducing its products to a global audience.

Throughout its history, Rocky Mountain Chocolate Factory has maintained a commitment to using premium ingredients and traditional chocolate-making techniques. The company focuses on handcrafting its chocolates in small batches to ensure freshness and superior taste.

Rocky Mountain Chocolate Factory’s dedication to quality and its unique offerings have earned it a loyal customer base and recognition within the confectionery industry. Its stores are often sought out by chocolate enthusiasts and tourists looking for delicious treats.

Today, the Rocky Mountain Chocolate Factory continues to thrive, offering a wide selection of chocolates and confections in its stores and franchises. Its commitment to quality, innovative products, and expansion efforts have made it a well-known name in the chocolate industry.

The company is currently generating negative earnings, but has a reasonable price to sales ratio of 1.10. Rocky Mountain is an extremely low cap company at $33 million, and should therefore be considered extremely speculative. 

Overall, the future of the chocolate industry is marked by innovation, sustainability, and meeting evolving consumer demands. As companies continue to adapt to changing trends and invest in responsible practices, the chocolate industry is poised for continued growth and diversification.

Disclosure: Author didn’t own any of the above at the time the article was written.

What is CRISPR and Why Should Your Portfolio Care?


 by Fred Fuld III

What is CRISPR?

CRISPR (Clustered Regularly Interspaced Short Palindromic Repeats) is a revolutionary gene-editing technology that allows scientists to make precise changes to an organism’s DNA. It is based on a natural system that bacteria use to defend against viral infections. The CRISPR-Cas9 system, in particular, has gained significant attention and is widely used in scientific research.

The CRISPR-Cas9 technology consists of two main components: the Cas9 enzyme and a guide RNA (gRNA). The gRNA is designed to target a specific sequence of DNA, and the Cas9 enzyme acts as molecular scissors to cut the DNA at that location. Once the DNA is cut, the cell’s natural repair mechanisms come into play, which can be harnessed to introduce desired genetic changes, such as adding, removing, or modifying specific genes.

CRISPR technology has revolutionized the field of genetic engineering and holds tremendous potential for various applications, including medical research, agriculture, and biotechnology. It has opened up new possibilities for understanding genetic diseases, developing new therapies, creating genetically modified organisms, and enhancing crop characteristics, among other things. However, it is still an active area of research and there are ongoing discussions and considerations regarding its ethical, legal, and social implications.

There are a few publicly traded companies that are in the CRISPR field. The CRISPR technology industry is at its very early stages, so there are risks involved with some of the smaller companies. Here are some of the pure plays, all of which are generative negative earnings.

Intellia Therapeutics (NTLA) is a biotechnology company that was founded in 2014 with the goal of developing CRISPR-Cas9-based therapies for the treatment of genetic diseases. The company was co-founded by Jennifer Doudna, one of the pioneers of CRISPR technology, along with Rodger Novak, Luciano Marraffini, and Nessan Bermingham.

The history of Intellia Therapeutics is closely tied to the breakthrough discovery of CRISPR-Cas9 as a powerful gene-editing tool. Jennifer Doudna’s research group, along with Emmanuelle Charpentier, published a seminal paper in 2012 that demonstrated the potential of CRISPR-Cas9 for precise DNA editing. This discovery laid the foundation for the development of Intellia’s therapeutic approach.

In its early years, Intellia Therapeutics focused on establishing its intellectual property and securing licenses to key CRISPR-Cas9 patents. The company also built a strong team of scientists and researchers with expertise in gene editing, molecular biology, and drug development.

Since its founding, Intellia Therapeutics has made significant progress in advancing its pipeline of potential therapies. The company has collaborated with various partners, including Novartis, Regeneron Pharmaceuticals, and Ospedale San Raffaele, to develop and commercialize CRISPR-based treatments for a wide range of genetic diseases.

Intellia’s research and development efforts have focused on several therapeutic areas, including genetic disorders, liver diseases, and cancer. The company has been involved in preclinical and clinical studies to evaluate the safety and efficacy of its CRISPR-based therapies.

The stock has a market cap of $3.75 billion, cash per share of $10.44, and has no long term debt. The latest quarterly revenue growth year-over-year was 11.5%.

CRISPR Therapeutics (CRSP) is a biotechnology company that was founded in 2013 with the aim of harnessing the potential of CRISPR-Cas9 gene editing technology for the development of novel therapies. The company was co-founded by Emmanuelle Charpentier, Jennifer Doudna, and Rodger Novak.

The history of CRISPR Therapeutics is intertwined with the groundbreaking discovery of CRISPR-Cas9 as a powerful tool for precise gene editing. In 2012, Emmanuelle Charpentier and Jennifer Doudna published a seminal paper demonstrating the feasibility of using CRISPR-Cas9 for targeted genome editing. This discovery opened up new possibilities for gene therapy and genetic engineering.

CRISPR Therapeutics was established shortly after this pivotal discovery. The company focused on translating the potential of CRISPR technology into therapeutic applications for the treatment of genetic diseases. CRISPR Therapeutics obtained licenses to key CRISPR-Cas9 patents and assembled a team of scientists and experts in the field.

Since its founding, CRISPR Therapeutics has made significant progress in its research and development efforts. The company has collaborated with various partners, including Vertex Pharmaceuticals, to advance its pipeline of potential therapies. CRISPR Therapeutics has focused on several therapeutic areas, such as blood disorders, genetic diseases, and immuno-oncology.

The company has conducted preclinical and clinical studies to evaluate the safety and efficacy of its CRISPR-based treatments. Notably, in 2019, CRISPR Therapeutics initiated the first clinical trial in the United States for CRISPR-based gene editing in humans. The trial aimed to evaluate the use of CRISPR-Cas9 to treat patients with transfusion-dependent beta-thalassemia.

CRISPR Therapeutics continues to be at the forefront of CRISPR-based therapeutics development, leveraging the potential of gene editing technology to address unmet medical needs.

It has a market cap of $4.59 billion, is debt free and has cash per share of $23.38. Quarterly sales growth year-over-year skyrocketed by over 10,000%. This is due to the fact that sales were extremely low a year ago.

Editas Medicine (EDIT) is a biotechnology company founded in 2013 with a focus on developing transformative genome editing technologies, particularly using CRISPR-Cas9, to treat genetic diseases. The company was co-founded by Jennifer Doudna, Feng Zhang, George Church, Keith Joung, and J. Keith Joung, all prominent scientists who have made significant contributions to the development of CRISPR technology.

The history of Editas Medicine can be traced back to the breakthrough discovery of CRISPR-Cas9 as a versatile gene-editing tool. In 2012, Jennifer Doudna and Emmanuelle Charpentier published a seminal paper demonstrating the feasibility of using CRISPR-Cas9 for precise DNA editing. Feng Zhang’s lab at the Broad Institute of MIT and Harvard also independently developed the CRISPR-Cas9 system for gene editing around the same time.

In 2013, Editas Medicine was established with significant investments from venture capital firms and scientific institutions. The company aimed to leverage the power of CRISPR technology to develop novel therapeutics for a range of genetic disorders. Editas Medicine holds licenses to key CRISPR-Cas9 patents and collaborates with academic and industry partners to advance its research and development efforts.

Since its inception, Editas Medicine has made progress in developing therapies for various genetic diseases. The company has focused on specific conditions such as inherited retinal diseases, which can cause vision loss, and has initiated clinical trials to evaluate the safety and efficacy of its CRISPR-based treatments.

The company sports a market cap of a bit over $582 million, and is debt free with $4.39 in cash per share. The latest quarterly revenue growth year-over-year was 45.6%.

CRISPR, initially considered a niche within the biotechnology industry, has the potential to transcend boundaries and emerge as the preeminent and rapidly expanding force among all biotech enterprises, poised to redefine the landscape of scientific advancements and medical breakthroughs.

Disclosure: Author didn’t own any of the above at the time the article was written.

Is Your Portfolio Ready for the Next Drought? Top Desalination Stocks

 


by Fred Fuld III

The desalination industry, also referred to as desalinization, is currently experiencing a period of rapid growth. This is due to a number of factors, including:

  • Increased water scarcity: As the global population grows and climate change worsens, water scarcity is becoming a more widespread problem. Desalination is a way to produce fresh water from seawater or brackish water, which can help to alleviate water scarcity.
  • Improved technology: Desalination technology has improved significantly in recent years, making it more efficient and cost-effective. This has made desalination more attractive to a wider range of countries and water utilities.
  • Government support: Many governments are providing financial and regulatory support for desalination projects. This is helping to drive investment in the industry and make desalination more accessible.

As a result of these factors, the global desalination market is expected to grow at a compound annual growth rate (CAGR) of 9.4% from 2023 to 2030. This growth is expected to be driven by demand from the Middle East, North Africa, and Asia.

Here are some of the key trends in the desalination industry:

  • The rise of membrane technology: Membrane technology is the most common technology used for desalination. It is a relatively efficient and cost-effective technology, and it is becoming increasingly popular.
  • The growth of seawater desalination: Seawater desalination is the most common type of desalination. It is used to produce large quantities of fresh water from seawater.
  • The increasing use of brackish water desalination: Brackish water desalination is a growing trend. It is used to produce fresh water from brackish water, which is less salty than seawater.
  • The development of new desalination technologies: There is ongoing research and development into new desalination technologies. These technologies could make desalination more efficient and cost-effective in the future.

Consolidated Water Co. Ltd. (CWCO) is a Bermuda-based company that owns and operates desalination plants in the Caribbean and the Middle East. CWCO is the largest publicly traded desalination company in the world by market capitalization.

CWCO owns and operates 11 desalination plants in the Caribbean and the Middle East. The company’s plants produce a total of approximately 250 million gallons of water per day. CWCO’s customers include government agencies, hotels, resorts, and industrial customers.

Financials

CWCO’s revenue for the fiscal year 2022 was $320 million. The company’s net income was $49 million. CWCO’s debt-to-equity ratio is 0.4. The stock trades at 34.5 times trailing earnings, and pays a dividend yield of 1.55%.

Growth Prospects

CWCO is well-positioned for growth in the desalination industry. The global desalination market is expected to grow at a compound annual growth rate (CAGR) of 9.4% from 2023 to 2030. CWCO’s focus on the Caribbean and the Middle East, two regions that are facing water scarcity, gives the company a competitive advantage.

Risks

The main risks to CWCO’s business include:

  • Increased competition: The desalination industry is becoming increasingly competitive. CWCO faces competition from other desalination companies, as well as from companies that are developing new desalination technologies.
  • Changes in government regulations: Government regulations could impact CWCO’s business. For example, changes in water quality standards could increase the cost of operating CWCO’s plants.
  • Changes in the global economy: The global economy could impact CWCO’s business. For example, a recession could lead to a decrease in demand for water from CWCO’s customers.

CWCO Summary

CWCO is a well-established company with a strong track record. The company is well-positioned for growth in the desalination industry. However, there are some risks to CWCO’s business, including increased competition and changes in government regulations.

Energy Recovery Inc. (ERII) is an American company that manufactures and sells desalination products. ERII’s products are used in a variety of desalination technologies, including reverse osmosis, multi-stage flash, and MED.

Business

ERII’s primary product is the PX pressure exchanger. The PX pressure exchanger is a device that recovers energy from brine streams in desalination plants. This energy recovery can lead to significant savings in energy costs. ERII’s PX pressure exchangers are used in desalination plants around the world.

Financials

ERII’s revenue for the fiscal year 2022 was $103.9 million. The company’s net income was $15.1 million. ERII’s debt-to-equity ratio is 0.3. The stock has a very high P/E ratio of 160, but a forward P/E of 50. The company is debt free.

Growth Prospects

ERII is well-positioned for growth in the desalination industry. The global desalination market is expected to grow at a compound annual growth rate (CAGR) of 9.4% from 2023 to 2030. ERII’s focus on the development and sale of energy recovery devices gives the company a competitive advantage.

Risks

The main risks to ERII’s business include:

  • Increased competition: The desalination industry is becoming increasingly competitive. ERII faces competition from other companies that are developing and selling energy recovery devices.
  • Changes in government regulations: Government regulations could impact ERII’s business. For example, changes in water quality standards could increase the cost of operating ERII’s devices.
  • Changes in the global economy: The global economy could impact ERII’s business. For example, a recession could lead to a decrease in demand for desalination products.

ERII Summary

ERII is a well-established company with a strong track record. The company is well-positioned for growth in the desalination industry. However, there are some risks to ERII’s business, including increased competition and changes in government regulations.

Here are some of ERII’s recent accomplishments:

  • In 2022, ERII signed a $10 million contract to supply its PX pressure exchangers to a desalination plant in Saudi Arabia.
  • In 2022, ERII opened a new manufacturing facility in China.
  • In 2022, ERII was named one of the “World’s Most Innovative Companies” by Fast Company.

ERII is a company to watch in the desalination industry. The company has a strong track record and is well-positioned for growth.

Veolia Environnement (VEOEY) is a French company that is one of the largest water treatment and management companies in the world. Veolia has a desalination division that operates over 1,950 desalination plants in 85 countries.

The stock, which trades over-the-counter, has a trailing price to earnings ratio of 27 and pays a yield of 3.86%.

The desalination industry is a rapidly growing industry with a lot of potential. It is a key part of the solution to the global water crisis. As the industry continues to grow, it is likely to see even more innovation and efficiency improvements, and the stocks in this arena should benefit.

Disclosure: Author didn’t own any of the above at the time the article was written.

If Cosmetics Companies are Recession Proof, Should You Be Buying Their Stocks?



by Fred Fuld III

You may have heard that the beauty industry is immune to recessions. Here are some reasons why.

  • Cosmetics are a necessity for many people. Even during tough economic times, people still want to look their best. Cosmetics can help people feel more confident and put-together, which can be especially important during times of stress.
  • Cosmetics are a relatively affordable luxury. Compared to other discretionary spending, such as travel or entertainment, cosmetics are relatively inexpensive. This makes them an attractive option for people who are trying to save money during a recession.
  • The cosmetic industry is constantly innovating. New products and trends are always emerging, which keeps consumers interested and spending. This makes the cosmetic industry less vulnerable to economic downturns than other industries that are more stagnant.

Of course, no industry is completely recession-proof. However, the cosmetic industry is generally considered to be more recession-resistant than other industries. This is due to the factors listed above.

Here are some additional points to consider:

  • Cosmetics can be a way to boost morale. During tough times, people may be looking for ways to improve their mood. Cosmetics can be a way to do this, as they can make people feel more confident and attractive.
  • Cosmetics can be a way to express oneself. People may use cosmetics to express their personal style or to reflect their mood. This can be especially important during times of change or uncertainty.

Overall, the cosmetic industry is a relatively resilient industry that is not as vulnerable to economic downturns as other industries. 

So if makeup companies are so good for surviving a recession, there are several stocks that are involved in this arena.

Coty Inc. (COTY) is a French-American multinational beauty company founded in 1904 by François Coty. With its subsidiaries, it develops, manufactures, markets, and distributes fragrances, cosmetics, skin care, nail care, and both professional and retail hair care products. Coty is one of the leading beauty companies in the world. The company has a portfolio of over 70 brands, and it operates in over 150 countries. Coty is committed to innovation, and it is constantly developing new products and services. Coty is a respected brand that is known for its high-quality products and its innovative marketing campaigns.

The stock has a fairly high price to earnings ratio of 67 but trades at a more reasonable 26 times earnings. Quarterly earnings growth year-over-year were up an incredible 108% on an 8.7% increase in sales. 

e.l.f. Beauty, Inc.(ELF) is a cosmetics company based in Oakland, California. The company was founded in 2004 by Joseph Shamah and Scott D. Weiss. e.l.f. stands for “Eyes Lips Face,” which reflects the company’s focus on affordable, high-quality cosmetics.

e.l.f. Beauty sells its products through a variety of channels, including its own website, e-commerce retailers, and brick-and-mortar stores. The company’s products are also available in over 60 countries worldwide.

e.l.f. Beauty is known for its affordable prices, its wide range of products, and its commitment to cruelty-free and vegan cosmetics. The company has been praised by consumers and critics alike for its high-quality products and its innovative marketing campaigns.

In recent years, e.l.f. Beauty has experienced rapid growth. In 2015, the company’s revenue was $100 million. By 2021, revenue had grown to $578.84 million. e.l.f. Beauty is now one of the leading cosmetics companies in the United States.

The stock has a trailing P/E ratio of 95 and a forward P/E of 50. Earnings per share quarter over quarter were 891.30% on a 78.30% rise in revenues. 

The Estée Lauder Companies Inc. (EL) reported a net profit of $1.091 billion for the twelve months ending March 31, 2023. This represents a decline of 67.49% from the net profit of $3.48 billion reported for the twelve months ending March 31, 2022.

The decline in profit was due to a number of factors, including:

  • A 12.42% decline in revenue for the twelve months ending March 31, 2023, to $15.862 billion.
  • Increased costs, including marketing and advertising expenses.
  • Impairment charges related to certain discontinued operations.

Despite the decline in profit, The Estée Lauder Companies Inc. remains a profitable company. The company’s strong brands, global reach, and focus on innovation position it well for continued growth in the years to come.

Here is a table showing The Estée Lauder Companies Inc.’s net profit for the past three years:

YearNet Profit (in millions)
20231.091
20223.48
20212.87

With a forward P/E of 37 , this is one of the few cosmetics companies that pays a dividend. The current yield is 1.38%.

Ulta Beauty, Inc. (ULTA) is a leading beauty retailer in the United States. The company operates over 1,300 stores across the country, and it also sells products online through its website and mobile app. Ulta Beauty offers a wide variety of beauty products, including cosmetics, fragrance, skin care, hair care, and salon services.

Ulta Beauty was founded in 1990, and it has grown rapidly in recent years. The company’s revenue has increased from $1.5 billion in 2009 to $14.3 billion in 2022. Ulta Beauty is now the largest beauty retailer in the United States, and it is the second-largest beauty retailer in the world.

The stock has one of the most favorable earnings ratios of the group, trading at 18 times trailing earnings and 17 times forward earnings.

A couple more makeup companies worth looking at which trade over-the-counter are the French company L’Oréal S.A. (LRLCY) with a P/E of 39 and a yield of 1.48%, and the Japanese company Shiseido Company, Limited (SSDOY) trading at 73 times earnings and yielding 1.54%.

Maybe some of these companies can make your portfolio look better.

Disclosure: Author didn’t own any of the above at the time the article was written.