Coty Inc (COTY): Is This Leading Fragrance Company a Buy?

Estee Lauder is the most expensive

Another peer, Estee Lauder Companies Inc (NYSE:EL), has a higher valuation than the other two companies. It is trading at $68.40 per share with a total market cap of $26.5 billion. The market values Estee Lauder at more than 14.4 times EV/EBITDA. When talking about the global prestige beauty industry, everybody would mention Estee Lauder Companies Inc (NYSE:EL), with 30 brands in around 150 countries and territories, employing around 38,500 employees globally.

Estee Lauder Companies Inc (NYSE:EL) is trying to grow its business in many regions of the world, especially in the emerging markets. It considers China to be the biggest long-term opportunity. Currently, China accounts for 5% of its global net sales, having three-year CAGR of 33% with 14 brands. For the full year 2013, the company expects to have around 6% growth in its EPS to $2.56-$2.61 per share.

My Foolish take

Coty Inc (NYSE:COTY) seems to be a decent stock for investors due to its global leading position in both fragrances and color cosmetics, and its reasonable valuation. However, with an EV multiple of 12.5, it is certainly not cheap. So do Avon Products, Inc. (NYSE:AVP) and Estee Lauder Companies Inc (NYSE:EL). I would prefer to wait for a cheaper price before initiating long positions in all three companies.

Anh HOANG has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article Is This Leading Fragrance Company a Buy? originally appeared on Fool.com.

Anh is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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