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Consumer staple stocks offer solid performance

For those of you who may not know what a consumer staple is, think of the products you insist on putting in your grocery cart even when your wallet is bare.

A stock that is considered a consumer staple will see its earnings stable even through economic downturns, as consumers will continue to purchase. Investors will usually load up on consumer staple stocks during pullbacks in the market, as their earnings will be more consistent then technology and growth stocks.

Inversely, in market upswings, investors often unload consumer staples looking for greater returns elsewhere. Below are four companies that are considered consumer staples, and have produced solid gains as of late:

Pepsico Inc. (PEP) six month return of 13 percent

Pepsi is the second largest soft drink maker in the world behind Coke. Their other products include Gatorade, Tropicana, Quaker Oats and Doritos. Second quarter earnings were strong, climbing 15 percent.

The company is crediting the boost in sales to their Frito-Lay chips division, which introduced a line of low fat snacks. Frito-Lay sales rose 6 percent in North America after beginning to sell the healthier products in May. The market place is demanding snacks lower in saturated fats-companies like Pepsico that pay attention to the marketplace will see earnings grow as their customer's waistlines shrink.

Anheuser-Bush Cos Inc. (BUD) (six month return of 10 percent)Luckily for investors, Bud's stock performance is not as weak as their beer. Anheuser-Bush is the world's largest brewer, producing and distributing beer brands such as Budweiser, Michelob and Bush.

Some may think that beer should not be classified as a staple, but tell that to the millions of Americans who polish off a six pack of Buds several times a week. Bud's earnings have benefited by trying to sell a healthier product. A 7.9 percent rise in second quarter earnings was contributed to their promotion and sales of its higher priced Michelob Ultra, which is lower in carbohydrates.

HJ Heinz Co. (HNZ) (six month return of 7 percent)

Chances are you have several Heinz products in your fridge or cupboard. Heinz has thousands of products including, of course, ketchup. Heinz controls 60 percent of the US ketchup market.

Their earnings have been down this year-even though condiment sales have been strong, their frozen food sales need to catch up, falling 12 percent last quarter. Their stock price has held in though, as some speculate Heinz is ripe for a takeover. A recent report in Business Week had Heinz as a takeover target of Nestle NA, the worlds largest food maker.

Campbell Soup Co. (CPB) (six month return of 9 percent)

Campbell's is the world's largest soup maker with a 70 percent share of the US market. Moreover, unbeknownst to many, they own and operate Godiva chocolate boutiques around the world.

The company recently raised its annual forecast as third quarter earnings increased 34 percent. They had their first increase in condensed soup sales in a year. This in part is due to increased US unemployment, as consumers shop for inexpensive meals.