General Mills, Inc. (GIS), ConAgra Foods, Inc. (CAG): The Grocery Cart Portfolio

ConAgra Foods, Inc. (NYSE:CAG) increased net sales by 8% in fiscal 2012, and rewarded its shareholders by raising the dividend by 4% last year. The stock yields 3% at recent prices, and trades at a forward P/E of 14. In addition, ConAgra Foods, Inc. (NYSE:CAG) has shored up its cash position recently, more than quadrupling the amount of cash on its balance sheet between November and May of 2012.

A thought experiment

The next time you’re at the grocery store, take a minute as you wait in the check-out lane to notice the items you’ve assembled in your cart.  You’ll probably realize that you’ve been purchasing the same items for years on end, and many of those items likely come from one (or more) of the stocks presented here.  Since you’re rewarding each of these companies with your business, why not own their shares and reward yourself as well?

These stocks probably aren’t going to produce Earth-shattering growth rates any time soon. After all, cereal, toothpaste, and frozen dinners aren’t exactly the next great growth engines of our time. However, these stocks do provide reliability and consistency. None of these companies will go out of business, even if the economy experiences difficulties. Recessions come and go, as an inevitable result of our cyclical economy. You can be certain that there will be another downturn–it’s just a matter of when.

Withstanding recessions is a lot easier when you have the peace of mind knowing your stocks are still going to pump out increasing dividends year in and year out. These companies are financially secure and have plenty of opportunities ahead of them, particularly in the emerging markets. Add it all up, and these stocks are a great foundation to a portfolio that will stand the test of time.

The article The Grocery Cart Portfolio originally appeared on Fool.com and is written by Robert Ciura.

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