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Food Stocks That Will Weather the Drought

3. General Mills (GIS - Get Report)

Company profile: General Mills has a market value of $25 billion. It is a consumer staples giant that will never go out of style as a major producer of packaged consumer-food products, including Big G cereals, Haagen-Dazs ice cream and Betty Crocker desserts/baking mixes. It also recently added a controlling interest in the Yoplait yogurt business.

Dividend Yield: 3.4%

Investor takeaway: Its shares are down 2.6% this year, a three-year, average annual return of 13% and a 10-year record of 7.6% annual returns. Analysts give its shares seven "buy" ratings, seven "buy/holds," and seven "holds," according to a survey of analysts by S&P.

S&P has it rated "buy" with a $42 price target, a 6% premium to the current price.

2. Ingredion (INGR)

Company profile: Ingredion, (formerly known as Corn Products International), with a market value of $4 billion, is one of the world's biggest corn refiners, and a major supplier of food ingredients and industrial products derived from the processing of corn. About a third of its sales are to companies in the processed-foods industry and about 14% to companies in the soft drink industry.

Dividend Yield: 1.5%

Investor takeaway: Its shares are up 1.4 % this year and have a three-year, average annual return of 20%. Analysts give its shares seven "buy" ratings, two "buy/holds," and two "holds," according to a survey of analysts by S&P. Analysts' consensus estimate is for earnings of $5.20 per share this year (down from $5.32 last year), and growth of 8% to $5.62 next year.

S&P has it rated "buy" with a $63 price target, a 20% premium to the current price. S&P says it expects that the company's use of "timely hedging can largely insulate it from corn price volatility on fixed-price contracts, but some other company business may be more exposed to changes in corn prices."

1. Kraft Foods (KFT)

Company profile: Kraft, with a market value of $73 billion, is one of the world's biggest branded food and beverage companies. Kraft plans to split into two public companies -- a global snacks business, to be named Mondelez International, and a North American grocery business, named Kraft Foods Group, which will keep the grocery business.

Dividend Yield: 2.8%

Investor takeaway: Its shares are up 11 % this year and have a three-year, average annual return of 16.5%. Analysts give its shares nine "buy" ratings, nine "buy/holds," and three "holds," according to a survey of analysts by S&P.

S&P has it rated "buy" with a $44 price target, a 7% premium to the current price. Analysts' consensus estimate is for earnings of $2.48 per share this year, growing to $2.76 in 2013, an 11% rise.
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.
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