Is the economy still on the brink of recession? The high PowerRatings on these three food stocks suggest that "need" is likely to outpace "want" in the minds of consumers going forward. And that makes stocks from the processed and packaged food industry increasingly attractive to active investors.

One of the ways that Wall Street describes economic demand is through the shorthand of "need" economies and "want" economies. A "want" economy is a healthy, growing economy in which consumers feel optimistic enough about the future to be willing to spend money on luxuries or things they merely "want."

The classic "want" economy in recent times was the boom times of the late 1990s as new products - from technological gadgets to the high-flying stocks of the companies that produced them - were the center of attention.

On the other hand, there is the "need" economy. A "need" economy isn't necessarily a recessionary economy. But it is an economy that is tilted toward slow growth, if not contraction. In these economies, consumers are more inclined to save their money, and to have a relatively pessimistic outlook on the economic futures. Their buying habits tend to revolve around things they must have and would likely purchase regardless of how bad things got.

The classic stock in a "need" economy is a utilities stock. Utilities stocks typically pay good, reliable dividends (which help savers). They also provide a service that people cannot do without. As bad as the economy may get, goes the thinking, people will still "need" to heat their homes, power their refrigerators, turn on the lights.

The idea of "need" economies and "need" stocks extends beyond utilities to include stocks such as the ones in today's report that belong to the Processed and Packaged Goods industry. Like electricity, the products produced by members of this industry group are thing that most people will continue to spend money on regardless of the state of the economy.

The fact that so many high Long Term PowerRatings stocks belong to groups like utilities and processed and packaged goods, may or may not be a warning sign to those who insist that good times for stocks are right around the corner. But what we do know from these high Long Term PowerRatings is that the stocks that earn them are both more reliable and better performers than the average stock. And our research - going back to 1995 - suggests that this reliability and outperformance is likely whether or not we experience an economy of "want" in 2008 or an economy of "need."

All three stocks in today's report have Long Term PowerRatings of 8 or more. We found that stocks with Long Term PowerRatings of 8 or more were higher one year later more than 74% of the time. The average stock, by comparison, was higher one year later less than 68% of the time.

In addition to being more reliable, high Long Term PowerRatings stocks have tended to outperform the average stock, as well. Our research indicated that stocks with Long Term PowerRatings of 8 or more gained on average more than 17% in a year's time. The average stock? Between 12-13%.

Pepsico Inc. (PEP | news | PowerRating | PR Charts ). Long Term PowerRating 9.

General Mills (GIS | news | PowerRating | PR Charts ). Long Term PowerRating 8.

Kellogg (K | news | PowerRating | PR Charts ). Long Term PowerRating 8.

Learn what you need to know as an active investor looking to invest in companies with a history of financial strength and a track record for growth. Click the link above or call us at 888-484-8220 extension 1 to get your copy of the "5 Secrets to Successful Stock Investing" today!

David Penn is Senior Editor for PowerRatings.net.

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