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In this article we identify stocks that have strong fundamentals and are relatively undervalued when compared to peers in the industry. We are confident that these companies can weather any slow down successfully and will be relatively less scathed by the meltdown in markets:

PepsiCo (NYSE:PEP) – PepsiCo is a global food and beverage company with operations all across the world and has over 285,000 employees. The company has grown both organically and inorganically and generates more than $60 billion of revenues annually with an equal contribution from snacks and beverages portfolios.

PepsiCo’s Frito-Lay business has been a star performer for the company with strong growth and high margins in the range of 25%-30%. PepsiCo stock is currently trading at $62.1 at trailing P/E of 14.7 times. This we feel is a lower multiple for the stock as we believe that PepsiCo will be less affected from the slowdown in the US and global markets compared to companies in other sectors like banks, infrastructure, tourism.

As PepsiCo is a consumption driven company it will be comparatively lesser affected by the economic slowdown. Also, PepsiCo has strong presence in the emerging markets which is one of the growth drivers for the company. The company has given EPS growth guidance of high-single-digit figure, including foreign exchange translation benefit of ~2 percentage points.

PepsiCo has one of the best ROE ratios in the industry at 33.4% and has a high dividend yield of 3.1%. Also, PepsiCo has consistently generated strong cash flows and has a strong management to drive the future of the company.

Procter & Gamble (NYSE:PG) – Procter & Gamble is the largest home and personal care company in the world. This global giant derives 34% of its total revenues from beauty and grooming, 18% of revenues from health and well-being and 48% of revenues from household care. This is another stock that is going to weather the current slowdown successfully as it is a consumption driven stock.

The company has generated revenue of $79 billion in 2010 and has a ROE of 18.5%. PG also has presence in all the major emerging countries including China, India, Brazil and Russia. The stock has a dividend yield of 3.3%. For fiscal year 2012, the company expects a revenue growth of 5%-9% with organic sales growth of 3%-6%.

Diluted EPS from continuing operations will be in the range of $4.17-$4.33. P&G boasts 24 brands with more than $1 billion sales each and the company is the market leader in many of the HPC segments. Apart from the top-line growth we are confident that the company can improve its operating margins because of strong pricing power and efficient operations. It has a market capitalization of $167 billion and is trading at a trailing P/E of 15.4 times.

General Electric (NYSE:GE) - General Electric Company is a diversified technology and financial services company with a global presence. GE is an innovation led company with a sophisticated patent protection process that has embedded innovation and R&D research deep into its culture. GE operates in more than 100 countries and employs about 300,000 people worldwide.

GE is a company that foresees the changing environment and provides products and services that satisfy the needs of corporations and individuals. We feel that the revenue growth outlook is improving and the better looking trend should draw investors to the stock.

The energy division which was a drag on the company's performance is expected to rebound with strong order flow and revenue visibility. Transportation, healthcare, and aviation are the other segments that are expected to do well. The stock is currently trading at a trailing P/E of 12.2x and appears to be cheap on a forward P/E basis.

We feel that GE might face some margin pressure in the next quarter but we are optimistic about the long-term prospects of this company. The company generates revenues of over $150.0 billion annually and has a market capitalization of $167 billion. The stock has a dividend yield of 3.4% and the stock has a return of equity of 9.6%.

Hewlett-Packard (NYSE:HPQ) - Hewlett-Packard is a technology company that operates in more than 170 countries in the world and is the world’s largest IT company. It generates revenue of $126 billion and is ranked 11th in the list of Fortune 500 companies.

HPQ has recently announced that it will shut down its smart phone business, sell off its PC business and will focus on its enterprise computing division. The company has embarked on a share repurchase program and is expected to make ~$13 billion-$17 billion over the next two years leading to EPS growth. The stock is currently trading at $23.6 which is its 52-week low and has fallen by 40.0% in the last year.

At a trailing P/E of 5.3 times, the stock looks extremely attractive. We feel that HPQ would come out successful with its focused approach and see a improvement in EPS in the next fiscal year. HP is another large giant that has focused on emerging markets as a part of its integral growth strategy.

The company has continuously endeavored to provide cheaper solutions to its customers and to make its operations more cost effective. It has a high return of equity of 21.6% and has a dividend yield of 1.53%.

Altria Group Inc. (NYSE:MO) - Altria Group, previously known as Philip Morris Companies is a holding company that through its subsidiaries, manufactures and sells cigarettes and other tobacco products, including cigars and pipe tobacco.

Also, the company has 28.7% ownership interest in the world’s second largest brewing company SABMiller Plc (OTCPK:SBMRF). The second half of 2011 adjusted diluted EPS growth is expected to be higher than first-half 2011, and the company has announced that its adjusted EPS for fiscal year 2011 will be in the range of $2.01-2.07.

Tobacco stocks are particularly attractive during these volatile times as these companies have steady cash flows, high dividend yields and high revenue visibility. The company has strong pricing power and can raise prices to protect its margins whenever required. The company has a market capitalization of $53.3 billion and is trading at a trailing P/E of 13.2 times.

The stock has an excellent ROE of 84.3% and has a high dividend yield of 5.9%. The company has also embarked on a share repurchase program for the tune of $1 billion which would also lead to increase in EPS

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.