Conventional market wisdom says that if you're growing wary of a market rally, or are ready to add a little defense to your portfolio, consumer staples have been the sector most investors head towards. And in this sector, there are a few names that always make their way into the conversation.

IN PICTURES: PG) is the largest maker of consumer products in the world, and a member of the Dow Jones Industrial Average. Coca-Cola (NYSE:KO), another Dow member, and rival PepsiCo (NYSE:PEP) are another pair of popular consumer staples stocks. And food and tobacco names like Kraft (NYSE:KFT) and Altria (NYSE:MO) are also found on the roster of highly-regarded consumer staples names.

Well, it often pays to look off the beaten path, so we decided to look at a pair of consumer staples names that make products you may already have in your house, but are unfamiliar with the stocks. Here's our pair:

Church & Dwight (NYSE:CHD) 52-Week Performance: 5.1% Forward P/E: 15
Jarden (NYSE:JAH) 52-Week Performance: 172% Forward P/E: 9.8%

Bank on Baking Soda
Church & Dwight makes an array of products you've probably either bought or are at least familiar with such as Orange Glo, Orajel, Trojan condoms and Brillo, but the company is most known for Arm & Hammer baking soda. That's an impressive product list, but the stock has significantly lagged the broader market over the past 52 weeks, gaining just 5% while the S&P 500 is up more than 34% in the same time.

Church & Dwight trades in-line with the consumer products group on a trailing P/E basis, but the shares are slightly cheaper than those of its rivals based on forward P/E, price-to-book and price-to-cash flow. Third-quarter net income soared 43% and sales climbed 2%, perhaps an indication that the stock won't remain cheap for long.

While Church & Dwight only yields 1%, the company's dividend history is nothing if not consistent. The company has paid a dividend for 435 consecutive quarters. It is worth noting that Church & Dwight is one of the steadiest earners on Wall Street and the company had $222 million in free cash flow through the first nine months of 2009 compared with $179 million a year earlier.

Time to Play this Card?
Jarden makes hundreds of products, from camping gear to toasters, but the company may be best known for its Bicycle playing cards and Mr. Coffee coffee makers. While those aren't the most exciting products in the world, Jarden's performance has been awe-inspiring over the past year, as the shares have nearly tripled. And Jarden is a cash flow king in its own right. The company expects to generate $250 million in free cash this year.

In October, Jarden reported an impressive earnings beat of its own, earning 93 cents a share for the third quarter when analysts were expecting 81 cents a share. As a result, all seven analysts covering Jarden raised their 2009 earnings estimates by an average of 14 cents to $2.54 a share. The 2010 consensus estimate is also up 5% in the past month.

While Jarden doesn't have much of a dividend history, investors should note that the company started paying a dividend for the first time in October. That's an encouraging sign, and while there are no guarantees the shares will continue their torrid pace, Jarden's earnings prospects indicate a bright future may indeed be in the cards.

The Bottom Line: From Your Shelves to Your Portfolio
Unless you're an extremely conservative investor, it may not be wise to overload your portfolio with conservative staples names. That said, if you're looking a for a steady earner, Church & Dwight fits the bill and if you're looking for a defensive name with midcap growth potential, Jarden may give you a winning hand. (Learn more about defensive stocks, Guard Your Portfolio With Defensive Stocks.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Stock Analysis

    Net Neutrality: Pros and Cons

    The fight over net neutrality has become an amazing spectacle. But at its core, it's yet another skirmish in cable television's war to remain relevant.
  2. Personal Finance

    A Day in the Life of an Equity Research Analyst

    What does an equity research analyst do on an everyday basis?
  3. Mutual Funds & ETFs

    ETF Analysis: PowerShares S&P 500 Downside Hedged

    Find out about the PowerShares S&P 500 Downside Hedged ETF, and learn detailed information about characteristics, suitability and recommendations of it.
  4. Mutual Funds & ETFs

    ETF Analysis: ProShares Large Cap Core Plus

    Learn information about the ProShares Large Cap Core Plus ETF, and explore detailed analysis of its characteristics, suitability and recommendations.
  5. Mutual Funds & ETFs

    ETF Analysis: iShares Core Growth Allocation

    Find out about the iShares Core Growth Allocation Fund, and learn detailed information about its characteristics, suitability and recommendations.
  6. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI USA Minimum Volatility

    Learn about the iShares MSCI USA Minimum Volatility exchange-traded fund, which invests in low-volatility equities traded on the U.S. stock market.
  7. Stock Analysis

    Should You Follow Millionaires into This Sector?

    Millionaire investors—and those who follow them—should take another look at the current economic situation before making any more investment decisions.
  8. Professionals

    What to do During a Market Correction

    The market has corrected...now what? Here's what you should consider rather than panicking.
  9. Mutual Funds & ETFs

    ETF Analysis: Vanguard Mid-Cap Value

    Take an in-depth look at the Vanguard Mid-Cap Value ETF, one of the largest and most popular mid-cap funds in the U.S. equity space.
  10. Mutual Funds & ETFs

    ETF Analysis: Schwab US Broad Market

    Take an in-depth look at the Schwab U.S. Broad Market ETF, an incredibly low-cost fund based on a wide selection of the U.S. equity market.
RELATED TERMS
  1. Equity

    The value of an asset less the value of all liabilities on that ...
  2. Hard-To-Sell Asset

    An asset that is extremely difficult to dispose of either due ...
  3. Sucker Yield

    When an investor has essentially risked all of his capital for ...
  4. PT (Perseroan Terbatas)

    An acronym for Perseroan Terbatas, which is Limited Liability ...
  5. Ltd. (Limited)

    An abbreviation of "limited," Ltd. is a suffix that ...
  6. BHD (Berhad)

    The suffix Bhd. is an abbreviation of a Malay word "berhad," ...
RELATED FAQS
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  5. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  6. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!