12 Best Beauty Stocks to Buy According to Hedge Funds

1. Procter & Gamble Company (NYSE:PG)

Number of Hedge Fund Holders: 68 

The best beauty stock is Procter & Gamble Company (NYSE:PG), which has also grown to be one of the biggest producers of consumer goods worldwide. Over half of the company’s consolidated sales come from sales outside of its home market (U.S.).

The Cincinnati-based company’s beauty division, which comprises major skin and personal care brands like Olay, Old Spice, Safeguard, Secret, SK-II, and Native, and hair care brands like Head & Shoulders, Herbal Essences, Pantene, and Rejoice, accounted for 18% of the company’s net sales in 2024, excluding the corporate segment.

In Q2 FY25, Procter & Gamble (NYSE:PG) reported a 2% YoY increase in net sales to $21.9 billion. Organic sales growth was 3%. Hair Care’s expansion in North America, Europe, and Latin America helped the Beauty segment’s organic sales rise by 2% YoY, while Personal Care’s double-digit growth was fueled by innovation and volume gains. However, despite the popularity of the high-end SK-II brand, Skin Care had a mid-single-digit loss due to lower volume.

Sales in the grooming segment increased by 2% YoY, with volume improvements led by innovation largely offset by an unfavorable geographic mix. A prior-year Gillette impairment was the primary cause of the 34% increase in diluted EPS to $1.88, while core EPS increased by 2%. Procter & Gamble Company (NYSE:PG) upheld its full-year forecast, supported by $4.9 billion in shareholder returns and $4.8 billion in solid operating cash flow.

Procter & Gamble Company (NYSE:PG)’s strategic goals, which include marketing and product innovation investments to support its portfolio of everyday, essential products, should guarantee that its brands continue to have influence over consumers and retailers, sustaining its broad moat over time.

Overall, Procter & Gamble Company (NYSE:PG) ranks first on our list of the 12 Best Beauty Stocks to Buy According to Hedge Funds. While we acknowledge the potential for PG to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. 12 Best Beauty Stocks to Buy According to Hedge Funds is originally published on Insider Monkey. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.