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So as we all prepare for the European collapse it may be worthwhile to pick out some stocks that you will be able to pick up on a pullback that provide some sort of relative safety with strong prospects for the future. In thinking along these lines, it would be prudent to consider the underlying stocks of products you find at the grocery store. The reasoning behind this is that people need to eat, and during recessionary times there is even more spending at grocery stores because people do not eat out at restaurants as much.

More importantly, food stocks are generally large-cap, conservative dividend plays, several of which have long histories of increasing it annually. They also pay more in dividends then the stores that sell their products. Big names like Wal-Mart (NYSE:WMT), Target (NYSE:TGT), and Whole Foods (NASDAQ:WFM) are all yielding under 3% right now and while they all certainly present a macro play it is very different than the stocks of the products they sell. The companies listed below all have best-in-breed products that continually sell year after year and are not as reliant on the battles between the groceries (with some exceptions).

So with that in mind here are some companies with dominant food products and strong dividend histories. Of course additional research would be necessary before making any buy, especially from a technical perspective, as well as gaining a deeper understanding of the companies’ product line.

B&G Foods (NYSE:BGS) – B&G has a very strong yield at 3.9%, but it was much higher before their 50% run up in price since October. The climb in price has brought their P/E up to 21 and market cap over $1 billion. This is obviously a huge turn off from investing right now, but again an opportunity may present itself if Europe falls apart. You’ll notice B&G on a lot of canned products, like pickles, but they also own Ortega, Cream of Wheat, and Emeril’s line, so they have a strong foot hold in the grocery store. A deeper look at B&G Foods can be found here, and one last note, B&G’s dividend was upped last quarter but they do not have a history of an increasing it annually.

ConAgra Foods (NYSE:CAG) – ConAgra also has a strong yield, at 3.6%, and like B&G they are a bit overprice and near its 52 week-high. ConAgra’s dividend was frozen for a 2-year span in 2008-2009, but they have since resumed increasing annually. In the last quarter of last year the payout was increased from $0.23 to $0.24. ConAgra owns brands like Swiss Miss, Healthy Choice, Egg Beaters, Hebrew National , among many others.

Heinz Company (NYSE:HNZ) – Heinz has not had much price movement since the summer and is currently yielding 3.6%. Like ConAgra, Heinz was forced to freeze their payouts during the recession. Their P/E is mediocre at 17 and the price is about 4% off its 52-week high. Heinz is obviously known its condiment line but they also own Smart-Ones, Bagel Bites, and Ore-Ida fries.

Kraft (KFT) – Kraft was on a tear last year, gaining over 22% in price appreciation. This has brought their yield down a bit, especially since it does not increase annually, but it is still at a formidable 3.1%. In addition, they are one of the largest companies on the list at $67 billion in market cap. Their product is in the process of being split between snacks and food, and each will boast a strong line-up of familiar names including, Oreos, Mac’n’Cheese, Wheat Thins, and Maxwell House.

PepsiCo (NYSE:PEP) – Pepsi is one of the safest plays on the list as a long term play. They, and Coca-Cola (NYSE:KO), have been around for longer than most can remember and will be for the foreseeable future. You can pick them up right now well off their 52-week high at a yield of 3.2% and a dividend that has been increasing every year for decades. Why Pepsi is on this list and Coke is not is because Pepsi takes half its revenues from Frito-Lays potato chips, Quaker, and other brands, proving they are more than just a beverage giant.

Kellogg (NYSE:K) – There are really only a few companies in the cereal aisle despite the fact that it can take nearly forever to choose a box at the store. The other big name would be General Mills (NYSE:GIS), but they were passed over for having cut their dividend in 2010 and because Kellogg is yielding higher at 3.4% to General Mills’ 3%. Aside from all of the cereals that Kellogg’s has, they also own names like Pop-Tarts, Nutri-Gran, and Eggo.

Sara Lee (SLE) – Sara Lee has the lowest yield on this list at only 2.4%, but they do have a pretty strong hold on the box-to-baked goods game. In addition to the baking ingredients, Sara Lee owns Ball Park hot dogs, Hillshire Farms, and Jimmy Dean breakfast sandwiches. They have a very low P/E, considering the rest of the industry, at only 13.

These 7 stocks present a fairly easy way to make a play on virtually all non-produce or dairy goods at the grocery store. Even in sour economic times consumers will need to eat and many will avoid being reduced to non-known brands. This is why these companies have decades worth of brand recognition built up and will prosper no matter the economic climate. At these prices they all have enticing dividend yields, but with all of the media discussion over the impeding European market failure, buying these stocks on a massive pullback could present major upside.

Source: Food Stock Dividends: A Play Pending European Collapse