The Next Billion-Dollar Industry: Tattoo Removal?
In a prior article, I took a look at five companies that will play important roles in today's competitive job market -- specifically those that help the job-seeker get in front of an employer for an interview. In this piece we'll focus on companies that can help you look your best in preparation for the upcoming face-to-face. But most important, these stocks can help your portfolio look spiffy.
Get rid of that skull tattoo on your neck
I once walked into a tattoo parlor with a friend of mine. She asked the owner how much it would cost to get a small tattoo just behind the ear. "What do you do?" he asked. "I'm a waitress," she said. "Do you want to be a waitress for the rest of your life?"
She ended up not getting it.
While tattoos are by no means an indication of one's ability or potential, they certainly have a stigma. In retrospect, what that brief tattoo parlor experience taught me was this: If tattoo artists are telling potential customers to reconsider, removing tattoos could be a very lucrative business. Cynosure (NAS: CYNO) is one of the few companies in this market, and given the ruthlessness of the job market nowadays, it stands to profit, as demand for laser tattoo removal has increased 32% from last year.
Young job-seekers especially may be where the growth lies. 20-to-24-year-olds have a 13.5% unemployment rate, while 22.2% of 18-to-19-year-olds are out of work. Seeing as the 18-to-24-year-old demographic has one of the higher proportions of tattoos at 22%, it stands to reason that tattoo removal may become more and more attractive if you desperately need a job.
On average it takes 10 sessions -- sometimes costing up to $200 apiece -- before a tattoo completely disappears. With this in mind, the tattoo removal market suddenly turns into a multibillion-dollar area in the 18-to-24-year-old market alone. Let's break down exactly how.
Around 6.6 million 18-to-24-year-olds in the U.S. have tattoos. If just a quarter of them decide to get a tattoo removed at some point, that's 1.65 million people paying up to $2,000 each to take their tats off. If we are conservative and assume it costs an average of $1,000, that's already a $1.6 billion industry. Considering that 38% of 30-to-39-year-olds have tattoos as well, we can immediately see that this market has even more potential than we've figured.
Cynosure's sales have been following suit; they were up 50% in the most recent quarter year over year, and the company beat both earnings and revenue estimates, while expanding margins. The company attributed its 92% jump in sales in the second quarter in part to the success of its laser products.
Did I mention that Cynosure is developing a laser treatment system for home use with consumer goods giant Unilever (NYS: UN) ? Talk about a respectable partner; the 85-year-old, $100 billion Unilever owns the Axe, Dove, St. Ives and Vaseline brand names, and has operations on all five major continents. With a 3.5% dividend yield and nearly $50 billion in annual sales, its stock looks like a pretty good investment, too.
But these aren't the only companies that can possibly pad your portfolio and help you to lock down that paycheck. After getting rid of that ill-advised tribal tattoo on your cheekbone, it may be time to start thinking about Nu Skin Enterprises (NYS: NUS) . While it's still searching for a verifiable fountain of youth, it does make anti-aging products and revitalizing skin care products. This market is a better way for stockholders to invest in the female contingency of the job-seeking population. Nu Skin has a solid dividend at nearly 2%, and it's been growing at a steady clip -- earnings have risen at an average of 40% per year over the past five years.
Cynosure, Unilever, and Nu Skin all help the job-seeker look his or her best for the interview. They also all provide opportunities for investors to polish up their portfolios. Macro trends, good dividends, and booming profits are a few of the aspects that make these companies in particular stand out.
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The article The Next Billion-Dollar Industry: Tattoo Removal? originally appeared on Fool.com.Fool contributorJohn Divineowns none of the stocks mentioned in the story above. Popeye has ignored persistent requests from the author to remove his tattoos and curb his daily spinach intake. You can follow him (John, not Popeye) on Twitter@divinebizkidand on Motley Fool CAPS@TMFDivine.The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.
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