Amid mounting concerns about skin cancer and aging effects from too much sun exposure, sunscreen is growing from a seasonal staple to a year-round health-care necessity, analysts say.
Research company IBISWorld projects that industry revenue will grow at an average annual rate of 3.1 percent to $446.2 million by 2019. An above-average 3.8 percent jump is expected for 2015.
Jason Gere of KeyBanc Capital Markets likes Johnson and Johnson (NYSE: JNJ; Price: $103.42), which owns Neutrogena, and Bayer AG (OTCMKTS: BAYRY; Price $151.76), which owns Coppertone. The two control half of the sunscreen market, according to IBISWorld. Furthermore, because both companies make a variety of other products, any risk that’s tied to sunscreen revenue not panning out as predicted is minimized, Gere says.
Both have a mean analyst recommendation of “buy” or better, according to MarketWatch and Zacks Investment Research.