In Gordon Pape's Internet Wealth Builder, contributing analyst Tom Slee looks at "recession-resistant" global stocks. Here, he reviews Philip Morris International (NYSE: PM) and PepsiCo (NYSE: PEP).

Slee explains, "Philip Morris continues to benefit from rising tobacco consumption and 'uptrading' as people in the emerging countries switch to more expensive products.

"Almost recession proof, the international tobacco industry is prospering thanks mainly to new markets, strong cash flows, and reduced litigation.

Is it time to ride the rails? In Gordon Pape's The Internet Wealth Builder, analyst Tom Slee reaffirms his buy rating on Burlington Northern Santa Fe (NYSE: BNI), his top pick in the sector.

"Burlington Northern is my preferred choice in the railroad industry. At first glance, Burlington Northern had a particularly bad first quarter.

"Profit was $0.86 a share, down sharply from $1.30 a share the year before. However, when unusual items such as an unfavourable coal rate decision are excluded, operating earnings amounted to a much more acceptable $1.13 a share, well above the 96c analysts were looking for.

"Some companies are managing very well now and quietly laying a foundation for solid earnings growth when the recovery gets underway," says Tom Slee.

The contributing editor to The Internet Wealth Builder adds, "A few even offer a good yield while we wait." One such company, he believes is Thomson Reuters Corp. (NYSE: TRI).

"I particularly like Thomson Reuters. It's low key and not terribly exciting, but by paying a $1.12 dividend to yield 4.1% the stock should provide investors with an excellent long-term return. Here's some background:

"It's hard to find any good news these days but I was pleasantly surprised with the third-quarter railway results, as almost all of the 'class 1 carriers' reported better than expected earnings," notes analyst Tom Slee.

The contributing editor to Gordon Pape's Internet Wealth Builder explains, "Several rail stocks are starting to look attractive at these depressed levels and Burlington Northern (NYSE: BNI) remains my preferred choice in the group." Here's his outlook.

"Even with the economic downturn starting to bite, reduced fuel costs and increased freight rates offset lower volumes. Equally important, the companies remain cautiously optimistic despite the miserable outlook.

"They are confident that further freight rate price increases in the 4% to 5% range are sustainable and will still allow them to undercut inefficient truckers.

"Unfortunately, none of this prevented the stocks from being battered during the market collapse. However, I think that fourth-quarter profits are likely to remain strong and the longer term outlook for railroads remains favorable.

"Burlington Northern continues to power ahead. A shrinking economy must eventually take its toll but there was no sign of any weakness in BNI's third-quarter results. Operating earnings came in at $1.91 a share, up 29% from $1.48 in 2007.

"Philip Morris International (NYSE: PMI) remains a buy, despite these difficult markets," says Tom Slee in Gordon Pape's Internet Wealth Builder. Here he reviews the global tobacco firm.

"Spun off from the Altria Group earlier this year, Philip Morris International is off to a flying start.

"The company posted strong second-quarter earnings. After a special charge for its Rothmans acquisition, earnings came in at 81 cents a share, up from 69 cents a share the year before.

"The company had been reporting as a clearly defined division of Altria so it's possible to make comparisons and plot progress.

"Gross revenues rose 17.6% to $15.6 billion with double-digit growth in all business segments, helped to some extent by currency benefits. Sales were particularly strong in Egypt, Russia, and Argentina.

"At the same time, the company is engaged in an extensive cost reduction program. It's a positive picture and PM rewarded investors with a 17% dividend increase from $1.84 to $2.16 a year.

"This is what I had been hoping for. Management is willing to share the wealth with investors and this could become one of the few defensive income stocks with growth potential, as long as you don't mind investing in a cigarette manufacturer.

"Having spent a lot of time recently studying the North American transportation industry, my conclusion is that trucking is on the decline while the railroads are poised to increase market share," notes Tom Slee.

The contributing editor to Gordon Pape's Internet Wealth Builder states, "The logical conclusion: buy rail stocks now." Here he looks at Kansas City Southern (NYSE: KSU) and Burlington Northern Santa Fe (NYSE: BNI).

"Who would have thought it? Railways are having a good year. They were supposed to be hunkered down, riding out the recession. Instead, the old iron horse is thriving.

"Surging demand for commodities is more than offsetting a slump in building materials shipments. Even higher energy costs are proving a plus for the railroads. Each jump in oil prices gives them a bigger edge over their gas guzzling competitors: trucks.

"Most important, the rails are able to raise rates despite the economic downturn. Their surcharges are sticking. Yet the stocks are out of favour.

"Enbridge Inc. (NYSE: ENB), already Canada's largest shippers of crude oil, is positioning itself to be the dominant distributor of Alberta's oil sands output," notes Tom Slee in Gordon's Pape's The Income Investor.

"The company is in excellent shape. Operating profit in the second quarter rose to $129.5 million, equal to 36 cents a share, up from $118.7 million the year before.

"All of the company's numerous, well-funded projects are on track and should start contributing to profits in 2009. There were no surprises or fireworks in the financial statements, just solid growth, exactly what we need in these volatile markets.

"It has a short- and a long-term program that involves $8 billion worth of projects at an advanced stage and a further $10 billion worth of undertakings on the drawing boards.

"Altria Group (NYSE: MO) is a company in transition, catching its breath after spinning off giant Kraft Foods, restructuring North American production facilities, and preparing to sell Philip Morris International," notes Tom Slee.

The contributing analyst with Internet Wealth Builder has reaffirmed his buy rating, noting "Analysts expect an announcement in the next month or so about the divestiture, as well as plans for a major stock repurchase program."

He adds, "Not that Altria is resting on its laurels, however. The world's largest tobacco company is test marketing a smokeless tobacco in order to combat smoking bans."

The product, he points out, called Marlboro Snus, is a small pouch of dried tobacco that users place in the mouth. Unlike chewing tobacco, however, Snus do not require spitting.

He states, "Because of the health hazards and resulting litigation, tobacco remains a controversial industry. However, if you can put that aside, the fundamentals for leading producers such as Altria remain good.

Slee adds, "While Europeans and North Americans have been abandoning the habit, it's estimated that there are now more than 300 million male smokers in China, equal to about the entire U.S. population. Whether we like smoking or not, the fact is that Altria is extremely well positioned to benefit from what remains a growth industry."

Altria, like most stocks, has taken a beating, he observes. But, he adds, "The stock is now trading at 15.9 times this year's expected earnings of $4.25 and yielding 4.1% on a $2.76 dividend. This provides the stock with downside protection."

Each day, Steven Halpern's TheStockAdvisors.com features the latest investment ideas and market commentary from the financial newsletter community.