Better Buy: Ulta Beauty vs. Estee Lauder Stock

Investors have stepped back from many makeup and skincare stocks in recent months due to weak growth expectations in the industry. Consumers are becoming more cautious in their spending patterns here after nearly two full years of robust growth. Cyclical upturns always follow these pullbacks, though, and so investors might consider buying stocks in this space while the valuations are temporarily depressed.

Let's take a closer look at two large players in the makeup world, Ulta Beauty (NASDAQ: ULTA) and Estee Lauder (NYSE: EL), to see which one might be the better fit for your portfolio.

Ulta Beauty has by far the stronger growth profile right now. Sales in the most recent quarter were up 9% at existing locations, and that was on top of an 18% surge a year ago. Estee Lauder announced a 6% organic sales increase in the U.S., by contrast, yet its overall revenue was down 8% due to its heavy exposure to travel markets around Asia.

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Source Fool.com