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NEW YORK (TheStreet) -- Consumer-staples stocks have trailed the broader equity market during the past year. Investors have preferred cyclicals -- those that stand to benefit the most from a rebound in the economy -- instead of the steady consumer companies that make detergents, toothpaste and packaged foods.

Now some fund managers are arguing that staples represent bargains. At a time when the

S&P 500

trades at about 15 times this year's earnings estimates, many staples command multiples of 14 or less.

"You usually find these companies selling at premiums to the market," says John Carey, manager of the

Pioneer Fund


. "After the rally, industrials and financials look expensive compared to consumer staples."

Managers who favor consumer staples say the sector deserves a premium price because of its long history of steady growth. During the 10 years ending in 2008, earnings of consumer-staples stocks grew 8.5% annually, compared with 1% for the S&P 500. Over the years, consumers have continued to buy more snacks, toilet paper and cosmetics.

Managers of

Dreyfus Appreciation

( DGADX), longtime proponents of consumer staples, argue that the sector is poised to grow at a healthy rate for years to come. Much of the expansion will occur in emerging economies.

Around the world, billions of people are becoming richer, Dreyfus notes. As soon as consumers get a few dollars of disposable income, they spend it on laundry detergent and soap. When a country's per capita gross domestic product passes $2,000, consumers begin flocking to buy disposable diapers and hairspray. At a per capita figure of $12,000, consumers enter a new stage, buying the full range of products, including dishwasher detergent and baby wipes. Only 1 billion of the world's 6 billion people have reached the top income level, so the growth of consumer markets can continue for decades.

Dreyfus Appreciation prefers dominant companies with strong balance sheets. Because many consumer-staples stocks meet the criteria, the fund has a third of its assets in the sector. Holdings include



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Procter & Gamble






Such steady companies have proved resilient in difficult markets, and that makes Dreyfus an ideal choice for conservative investors. The fund typically outperforms during downturns, and it has returned 1% annually during the past decade, beating the S&P 500 by a percentage point while taking less risk.

Another cautious fund that has excelled in downturns is Pioneer. During the past decade, the fund has returned 1.3% annually, outdoing 64% of its large-blend competitors. Seeking steady growth, manager John Carey typically overweights food and household products. Carey only buys reliable companies that seem poised to succeed for many years. The fund has an annual turnover rate of 11%, suggesting he holds stocks on average for nearly a decade.

Carey, who began running the fund in 1986, has owned



for more than 20 years. "The earnings trend has been upward for a very long time," he says.

Carey says the pharmacy chain should continue growing by opening new outlets. In addition, the aging population seems likely to continue buying more drugs.

Another longtime holding is

General Mills


. Carey says the company has room to grow as cereal sales expand overseas.

Consumer stocks have helped

Forester Value


to make money in bear markets. The fund stayed in the black throughout the three-year downturn that began in 2000. In 2008, Forester ranked as the only diversified domestic equity fund to produce a positive return. During the past 10 years, the fund has returned 5.6% annually, outdoing 80% of large-value competitors.

Manager Tom Forester looks for stocks with growth potential and below-average price-to-earnings ratios. One of the fund's steadiest holdings has been

Kraft Foods

( KFT). Kraft's recent acquisition of



should help the company expand in overseas markets, Forester says. "As the economy rebounds, we should see a nice increase in sales," he says.

Forester also likes

Altria Group


. The cigarette company has a rich balance sheet and steady sales, he says.

Stan Luxenberg is a freelance writer who specializes in mutual funds and investing. He was formerly executive editor of Individual Investor magazine.