Even in a recession, people will "snack" themselves to the point of sugar highs so powerful that they will think the economy is still expanding. According to Reuters, "PepsiCo (NYSE: PEP) expects its business based on "comfort foods" to be resilient to a U.S. economic slowdown, Chief Executive Indra Nooyi said on Wednesday."

The point is probably well-founded. Soda and chips are still something people can enjoy for a few dollars. And many people are addicted to the sugar and salt. And it makes Pepsi and rival Coke (NYSE: KO) effective hedges against a downturn.

Pepsi sells for just over $69 now, down from a 52-week high of almost $80. It has a yield of 2.1% and $2.2 billion in cash and short- term investments. The company has an operating margin of about 20%. In the last quarter, operating income was $2.1 billion on revenue of $10.2 billion. Coke's financial dynamics look about the same.

All in all, this makes these stocks "safe" bets if the markets continue to fall.

Douglas A. McIntyre is an editor at 247wallst.com.

PepsiCo: Snacks will survive recession originally appeared on BloggingStocks on Wed, 23 Jan 2008 11:00:00 EST. Please see our terms for use of feeds.