Choosing the right company to invest in within the household and personal products sector requires careful analysis. The Estée Lauder Companies Inc. (EL) and Spectrum Brands Holdings, Inc. (SPB) are two prominent players offering diverse consumer products. While Estée Lauder focuses on premium beauty and skincare innovation, Spectrum Brands spans home care and pet products. This article will help you decide which company presents the most compelling investment opportunity for your portfolio.
Table of contents
Companies Overview
I will begin the comparison between The Estée Lauder Companies Inc. and Spectrum Brands Holdings, Inc. by providing an overview of these two companies and their main differences.
The Estée Lauder Companies Inc. Overview
The Estée Lauder Companies Inc. is a global leader in the household and personal products industry, specializing in the manufacture, marketing, and sale of skin care, makeup, fragrance, and hair care products. Founded in 1946 and headquartered in New York City, it operates a diverse portfolio of brands including Estée Lauder, MAC, Clinique, and others. The company reaches consumers via department stores, specialty retailers, freestanding stores, and digital platforms worldwide.
Spectrum Brands Holdings, Inc. Overview
Spectrum Brands Holdings, Inc. is a branded consumer products company operating worldwide in household and personal care, pet care, and home and garden segments. Headquartered in Middleton, Wisconsin, and incorporated in 2009, it markets products under well-known brands such as Black & Decker, Remington, 8IN1, and Spectracide. Spectrum sells through retailers, e-commerce, wholesalers, and distributors, focusing on home appliances, pet products, pest control, and outdoor solutions.
Key similarities and differences
Both companies operate within the consumer defensive sector and focus on household and personal products. Estée Lauder concentrates on beauty and personal care with a wide luxury brand portfolio, whereas Spectrum Brands offers a broader range including home appliances, pet care, and garden products. Estée Lauder’s business is strongly brand-driven in cosmetics and skincare, while Spectrum emphasizes diverse consumer goods across multiple product categories.
Income Statement Comparison
This table provides a side-by-side comparison of key income statement metrics for The Estée Lauder Companies Inc. and Spectrum Brands Holdings, Inc. for their most recent fiscal years.
| Metric | The Estée Lauder Companies Inc. | Spectrum Brands Holdings, Inc. |
|---|---|---|
| Market Cap | 40.7B | 1.53B |
| Revenue | 14.29B | 2.81B |
| EBITDA | 193M | 215M |
| EBIT | -636M | 117M |
| Net Income | -1.13B | 99.9M |
| EPS | -3.15 | 3.88 |
| Fiscal Year | 2025 | 2025 |
Income Statement Interpretations
The Estée Lauder Companies Inc.
The Estée Lauder Companies showed a declining trend in revenue from $17.7B in 2022 to $14.3B in 2025, accompanied by a net income drop from $2.39B to a loss of $1.13B in 2025. Gross margins remained relatively high at 73.9%, yet EBIT and net margins turned unfavorable in 2025. The latest year marked a sharp contraction in profitability and earnings per share.
Spectrum Brands Holdings, Inc.
Spectrum Brands reported a revenue decrease from $3.13B in 2022 to $2.81B in 2025, with net income fluctuating, including a $1.8B boost in 2023 due to discontinued operations but settling at $99.9M in 2025. Margins were modest, with a gross margin of 36.7% and neutral net and EBIT margins in 2025. Recent performance showed margin declines and earnings pressure despite positive gross profitability.
Which one has the stronger fundamentals?
Both companies experienced revenue and net income declines over the period, with unfavorable income statement growth metrics. Estée Lauder’s higher gross margin contrasts with its negative EBIT and net margins, while Spectrum Brands had lower margins but more neutral EBIT and net margin statuses. Overall, each faces profitability challenges, reflected in their unfavorable global income statement evaluations.
Financial Ratios Comparison
This table presents the most recent financial ratios for The Estée Lauder Companies Inc. and Spectrum Brands Holdings, Inc., based on their fiscal year ending in 2025.
| Ratios | The Estée Lauder Companies Inc. (EL) | Spectrum Brands Holdings, Inc. (SPB) |
|---|---|---|
| ROE | -29.3% | 5.23% |
| ROIC | 6.44% | 4.95% |
| P/E | -25.7 | 13.5 |
| P/B | 7.53 | 0.71 |
| Current Ratio | 1.30 | 2.26 |
| Quick Ratio | 0.92 | 1.41 |
| D/E (Debt-to-Equity) | 2.44 | 0.34 |
| Debt-to-Assets | 47.5% | 19.4% |
| Interest Coverage | 2.37 | 4.16 |
| Asset Turnover | 0.72 | 0.83 |
| Fixed Asset Turnover | 2.79 | 8.55 |
| Payout ratio | -54.5% | 48.2% |
| Dividend yield | 2.12% | 3.57% |
Interpretation of the Ratios
The Estée Lauder Companies Inc.
The Estée Lauder shows a mixed ratio profile with a slightly unfavorable overall rating. Key concerns include negative net margin (-7.93%) and return on equity (-29.31%), alongside high debt-to-equity (2.44) and weak interest coverage (-1.57). Neutral metrics like current ratio (1.3) suggest moderate liquidity. The company pays dividends with a favorable 2.12% yield, but risks include coverage issues due to negative free cash flow to equity.
Spectrum Brands Holdings, Inc.
Spectrum Brands exhibits generally favorable financial ratios, with strengths in valuation metrics (PE 13.51, PB 0.71) and liquidity (current ratio 2.26, quick ratio 1.41). Debt levels are modest (debt-to-equity 0.34, debt-to-assets 19.36%), and interest coverage is neutral at 3.91. Despite a moderate net margin of 3.56%, dividend yield is healthy at 3.57%, supported by a solid free cash flow yield, reflecting shareholder-friendly returns.
Which one has the best ratios?
Spectrum Brands stands out with a favorable overall evaluation, driven by strong liquidity, low leverage, and attractive valuation ratios. The Estée Lauder, while offering dividends, faces significant profitability and leverage challenges, resulting in a slightly unfavorable rating. Thus, Spectrum Brands has the more robust ratio profile based on the fiscal year 2025 data.
Strategic Positioning
This section compares the strategic positioning of The Estée Lauder Companies Inc. (EL) and Spectrum Brands Holdings, Inc. (SPB) regarding Market position, Key segments, and disruption:
The Estée Lauder Companies Inc.
- Leading global player in personal products facing moderate competitive pressure.
- Focused on skin care, makeup, fragrance, and hair care with multiple premium brands.
- No explicit mention of technological disruption exposure in the personal care industry.
Spectrum Brands Holdings, Inc.
- Smaller scale consumer products company with lower beta, moderate competitive pressure.
- Diverse segments: Home & Personal Care, Global Pet Care, and Home & Garden products.
- No explicit mention of technological disruption exposure in consumer goods sectors.
The Estée Lauder Companies Inc. vs Spectrum Brands Holdings, Inc. Positioning
EL adopts a concentrated strategy focused on premium personal care segments with strong brand presence. SPB pursues a diversified approach across pet care, home, and personal products, balancing multiple consumer markets but with smaller scale.
Which has the best competitive advantage?
Both companies exhibit ROIC below WACC, indicating value destruction; however, SPB shows improving profitability while EL faces declining returns, suggesting SPB’s competitive position may be slightly more resilient.
Stock Comparison
The stock prices of The Estée Lauder Companies Inc. and Spectrum Brands Holdings, Inc. have exhibited significant bearish trends over the past 12 months, with both experiencing accelerated declines followed by notable recent recoveries.
Trend Analysis
The Estée Lauder Companies Inc. showed a 24.65% price decline over the past year, indicating a bearish trend with acceleration. Recently, it gained 16.89%, showing a short-term recovery but overall high volatility.
Spectrum Brands Holdings, Inc. experienced a 20.57% price drop over 12 months, also bearish with acceleration. The recent 17.3% gain suggests some recovery, accompanied by lower volatility than Estée Lauder.
Comparing both, Estée Lauder faced a steeper overall loss but similar recent gains; however, Spectrum Brands delivered the highest market performance in the recent period with a stronger buyer dominance.
Target Prices
The current consensus target prices suggest a mixed outlook for these companies.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| The Estée Lauder Companies Inc. | 130 | 70 | 106.67 |
| Spectrum Brands Holdings, Inc. | 75 | 75 | 75 |
Analysts expect The Estée Lauder stock to trade slightly below its current price of 113.02 USD, indicating some potential downside. Spectrum Brands shows a firm target price above its current 63.2 USD, suggesting possible upside.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for The Estée Lauder Companies Inc. (EL) and Spectrum Brands Holdings, Inc. (SPB):
Rating Comparison
EL Rating
- Rating: D+, considered very favorable overall by analysts.
- Discounted Cash Flow Score: Moderate score of 2, indicating some valuation caution.
- ROE Score: Very unfavorable at 1, showing weak profit generation from equity.
- ROA Score: Very unfavorable at 1, reflecting poor asset utilization.
- Debt To Equity Score: Very unfavorable at 1, indicating higher financial risk.
- Overall Score: Very unfavorable at 1, reflecting weak financial standing.
SPB Rating
- Rating: B, considered very favorable overall by analysts.
- Discounted Cash Flow Score: Very unfavorable score of 1, suggesting potential overvaluation.
- ROE Score: Moderate score of 2, indicating better efficiency in generating profit from equity.
- ROA Score: Moderate score of 3, demonstrating effective asset use in generating earnings.
- Debt To Equity Score: Moderate score of 3, implying better financial stability and lower risk.
- Overall Score: Moderate at 3, showing comparatively stronger financial health.
Which one is the best rated?
Based strictly on the provided data, SPB is better rated overall with a B rating and moderate scores in key financial metrics, while EL has a lower D+ rating and mostly very unfavorable scores. SPB demonstrates stronger profitability and financial stability.
Scores Comparison
The comparison of the companies’ financial health scores is as follows:
EL Scores
- Altman Z-Score: 3.11, indicating a safe zone.
- Piotroski Score: 5, representing an average rating.
SPB Scores
- Altman Z-Score: 1.77, indicating a distress zone.
- Piotroski Score: 6, representing an average rating.
Which company has the best scores?
Based on the provided data, EL has a higher Altman Z-Score in the safe zone, while SPB’s score is in the distress zone. Both have average Piotroski Scores, with SPB slightly higher at 6 versus EL’s 5.
Grades Comparison
Here is a comparison of the recent grades assigned to The Estée Lauder Companies Inc. and Spectrum Brands Holdings, Inc.:
The Estée Lauder Companies Inc. Grades
The following table summarizes recent grades from notable financial institutions for Estée Lauder:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Wells Fargo | Maintain | Equal Weight | 2026-01-05 |
| Raymond James | Upgrade | Strong Buy | 2026-01-05 |
| Citigroup | Maintain | Neutral | 2025-12-17 |
| Evercore ISI Group | Maintain | Outperform | 2025-12-16 |
| Rothschild & Co | Downgrade | Sell | 2025-11-25 |
| Argus Research | Upgrade | Buy | 2025-11-11 |
| JP Morgan | Maintain | Overweight | 2025-10-31 |
| Telsey Advisory Group | Maintain | Market Perform | 2025-10-31 |
| UBS | Maintain | Neutral | 2025-10-31 |
| RBC Capital | Maintain | Outperform | 2025-10-31 |
Estée Lauder’s grades show a mixed trend with upgrades to Strong Buy and Buy, balanced by a downgrade to Sell, reflecting varied analyst sentiment.
Spectrum Brands Holdings, Inc. Grades
Recent grading data from credible sources for Spectrum Brands are as follows:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Canaccord Genuity | Maintain | Buy | 2025-11-17 |
| Wells Fargo | Maintain | Equal Weight | 2025-11-14 |
| Wells Fargo | Maintain | Equal Weight | 2025-09-25 |
| Canaccord Genuity | Maintain | Buy | 2025-08-08 |
| Wells Fargo | Maintain | Equal Weight | 2025-07-09 |
| Canaccord Genuity | Maintain | Buy | 2025-06-25 |
| UBS | Maintain | Buy | 2025-05-09 |
| UBS | Maintain | Buy | 2025-04-17 |
| Wells Fargo | Maintain | Equal Weight | 2025-04-16 |
| Wells Fargo | Maintain | Equal Weight | 2025-04-02 |
Spectrum Brands’ grades consistently indicate a Buy or Equal Weight stance, showing stable analyst confidence without recent downgrades.
Which company has the best grades?
Spectrum Brands holds a more consistent Buy rating consensus, while Estée Lauder’s ratings are more mixed with both upgrades and downgrades. Investors might interpret Spectrum Brands’ steadier grades as less volatile analyst sentiment.
Strengths and Weaknesses
Below is a comparison table highlighting the key strengths and weaknesses of The Estée Lauder Companies Inc. (EL) and Spectrum Brands Holdings, Inc. (SPB) based on recent financial and operational data.
| Criterion | The Estée Lauder Companies Inc. (EL) | Spectrum Brands Holdings, Inc. (SPB) |
|---|---|---|
| Diversification | Strong product diversification with dominant Skin Care ($6.96B) and Makeup ($4.21B) segments. | Diverse portfolio including Global Pet Supplies ($1.08B), Home and Personal Care ($1.15B), and Home and Garden ($0.57B). |
| Profitability | Negative net margin (-7.93%) and ROE (-29.31%), indicating current profitability challenges. | Positive net margin (3.56%) and ROE (5.23%) but still below ideal levels. |
| Innovation | Declining ROIC trend (-51.3%), showing weakening capital efficiency and value destruction. | Improving ROIC trend (+255%), indicating increasing profitability and better value creation. |
| Global presence | Extensive global footprint in luxury cosmetics markets. | Strong presence in consumer goods, especially pet supplies and home care markets. |
| Market Share | Leading market share in premium cosmetics and skincare segments. | Solid market share in pet supplies and home care but less dominant overall. |
Key takeaways: Estée Lauder shows strong product diversification and market leadership but faces profitability and capital efficiency issues. Spectrum Brands demonstrates improving profitability and a favorable financial profile, supported by diversified consumer goods segments. Investors should weigh EL’s luxury brand strength against its financial headwinds, while SPB presents a more stable but less dominant market position.
Risk Analysis
Below is a comparative risk overview for The Estée Lauder Companies Inc. (EL) and Spectrum Brands Holdings, Inc. (SPB) based on the most recent 2025 data:
| Metric | The Estée Lauder Companies Inc. (EL) | Spectrum Brands Holdings, Inc. (SPB) |
|---|---|---|
| Market Risk | Moderate (Beta 1.15; volatile market exposure) | Lower (Beta 0.68; less volatile) |
| Debt level | High (Debt/Equity 2.44; elevated financial leverage) | Low (Debt/Equity 0.34; conservative leverage) |
| Regulatory Risk | Moderate (global operations, cosmetics regulations) | Moderate (diverse product lines, regulatory scrutiny) |
| Operational Risk | Moderate (complex global supply chain) | Moderate (diverse segments, supply chain risks) |
| Environmental Risk | Moderate (sustainability initiatives, raw material sourcing) | Moderate (chemical and pest control products impact) |
| Geopolitical Risk | Moderate (global market exposure) | Moderate (global supply chain and sales) |
In synthesis, EL’s most significant risks stem from its high financial leverage and unfavorable profitability ratios, increasing vulnerability to market downturns and interest costs. SPB shows lower debt risk but faces challenges indicated by its Altman Z-score in the distress zone, signalling potential financial instability. Investors should weigh EL’s market sensitivity against SPB’s financial distress signals, prioritizing risk management accordingly.
Which Stock to Choose?
The Estée Lauder Companies Inc. (EL) shows a declining income with a negative net margin of -7.93% and deteriorating profitability. Its financial ratios are slightly unfavorable, including a high debt-to-equity ratio of 2.44 and negative return on equity of -29.31%. EL’s credit rating is very favorable, but the company is shedding value with a very unfavorable moat status.
Spectrum Brands Holdings, Inc. (SPB) also experiences declining income but maintains a positive net margin of 3.56% and moderate profitability. Its financial ratios are largely favorable, with low debt-to-equity at 0.34 and a current ratio of 2.26. SPB holds a very favorable rating and a slightly unfavorable moat with improving profitability and growing ROIC.
Investors with a risk-tolerant or growth-oriented profile might find EL’s situation indicative of potential turnaround opportunities despite current weaknesses. Conversely, risk-averse investors seeking stability and stronger financial health might view SPB’s favorable ratios and improving profitability as more appealing.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of The Estée Lauder Companies Inc. and Spectrum Brands Holdings, Inc. to enhance your investment decisions:
