Great Stocks for Both Bull and Bear Markets: PepsiCo, Inc. (PEP), McDonald’s Corporation (MCD)

As the saying goes, premium businesses frequently command premium valuations.  Some of the best stocks over time have proven to be those whose products are purchased regardless of the economic climate.  In times like these, when the market keeps climbing to new highs and bargain stocks are few and far between, it pays to seek safety.  While there aren’t many stocks out there that can be called screaming bargains, there are a few of America’s best businesses that should be owned regardless of the prevailing economy.

Cheeseburgers, Toothpaste, and Soft Drinks, oh my!

Dow component McDonald’s Corporation (NYSE:MCD) is a pillar of stability. In fact, McDonald’s Corporation (NYSE:MCD) was one of only two stocks in the Dow Jones Industrial Average to post positive returns in 2008, in what was a terrible year for the broader market.

In January, McDonald’s reported great full-year 2012 results. Global comparable sales increased 3.1%, and consolidated revenues climbed 5% on a constant currency basis. Diluted earnings per share increased 5% as well on a constant currency basis to $5.36 per share.

Furthermore, the company’s future is bright. McDonald’s Corporation (NYSE:MCD) has set ambitious goals for international expansion. McDonald’s is executing on its plan to open 225 to 250 new restaurants every year in China until it reaches its stated goal of 2,000 restaurants there by the end of 2013. Moreover, the company has now targeted growth through an additional member nation of the BRIC countries: Russia. McDonald’s Corporation (NYSE:MCD) has 357 restaurants in more than 85 Russian cities, with plans to open at least 150 self-operated restaurants in Russia over the next three years.

Fellow Dow member The Procter & Gamble Company (NYSE:PG) directs investors’ collective attention to its 50 ‘Leadership Brands,’ meaning the 50 products that comprise 90% of the company’s revenues and more than 90% of its profits. Twetny-five of these brands are billion-dollar brands, each generating at least $1 billion in annual sales. Its flagship brands can be found in virtually every aisle in the local grocery store. P&G announced fiscal 2012 sales of just north of $83 billion, an increase in total revenues of more than 3% year over year.

Last but not least, PepsiCo, Inc. (NYSE:PEP) has a long list of brands that appeal to consumers, including its namesake soft drinks. The company has taken measurable steps to diversify its product portfolio, with additions including Quaker Oats and Lays. PepsiCo, Inc. (NYSE:PEP) is much more than just a soda company. To that end, the company’s revenue is evenly split between food and beverages. In total, Pepsi has 22 brands that each brings in at least $1 billion in annual sales.