My Top 2 Stocks: Starbucks Corporation (SBUX) and McCormick & Company, Incorporated (MKC)

To be sure, things aren’t always pretty in the short term. McCormick & Company, Incorporated (NYSE:MKC) fell flat with its fourth-quarter earnings release. The thing is, when shares dropped an unheard-of 6% after those mediocre earnings, investors quickly bought up more shares at the lower price. Three weeks later, shares had recovered and are now up 7.5% on the year — the telltale sign of a must-have equity.

Spice and seasoning may seem like an uninspiring addition to your portfolio, but it is the boring companies that do best. McCormick & Company, Incorporated (NYSE:MKC) is the dominant company in this industry, twice as big as its next closest competitor. Net sales have doubled over the past 10 years, and a combination of strategic acquisitions and internal innovation drives current growth. The company estimates that a 2013 acquisition in China will increase sales there by 60%. Last year, McCormick & Company, Incorporated (NYSE:MKC) launched 250 new products around the globe. Those new products accounted for 8% of total sales, and by 2015 the company expects that number to climb to 10%.

In other words, the future is bright at McCormick & Company, Incorporated (NYSE:MKC). Its commitment to paying dividends doesn’t hurt, either. Its average annual return since 1981 has been 15.1%.

Foolish takeaway
Investors committed to buying low-P/E valuations may want to wait for a pullback before buying in, as both sit above 20 at the moment. Valuation matters, and I won’t try to convince you otherwise, but I will try to persuade you to watch both of these companies for an entry point you feel comfortable with. I did my research and feel good about both of these investments, finally buying after having them on my radar for quite some time, and I encourage investors to do the same.

The article My Top 2 Stocks: Starbucks and McCormick originally appeared on Fool.com and is written by Aimee Duffy.

Fool contributor Aimee Duffy owns shares of Starbucks and McCormick. Click here to see her holdings and a short bio. If you have the energy, follow her on Twitter, where she goes by @TMFDuffy.The Motley Fool recommends McCormick and (NYSE:MKC) Starbucks and owns shares of Starbucks.

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