While grocery shopping the other day, I came across a telling sales display: It was one shelf split down the middle. On one side was Tide laundry detergent, priced at $17.99. On the other side was generic, store-brand detergent -- the same size, in a nearly identical bottle -- for $7.99.

The display was obviously intentional. Stores are feeding off consumers' newfound frugality by pushing cheap in-house labels that work about as well as their name-brand competitors. In years past, companies like Procter & Gamble (NYSE:PG) and Clorox (NYSE:CLX) could rake in profit from high-priced goods as consumers viewed brand prestige as worth paying up for. Now companies like Costco (NYSE:COST) have the edge. The cheaper, the better -- period.

This makes no sense to me
So why then am I suggesting consumer staples like Procter & Gamble and Clorox present a big opportunity for investors? It's quite simple. Headwinds the sector faces from frugal consumers get washed away when you consider a far more important factor: valuation.

Procter & Gamble has seen earnings growth stall since the recession began. But compensating for that has been a tremendous compression in its earnings multiple:

Year

Average P/E Multiple

2004

24.2

2005

21.2

2006

22.0

2007

22.4

2008

19.1

Current

14.1

Source: Capital IQ, a division of Standard & Poor's.

Sure, from the outside, a company like Costco might look like a clear winner for the coming years (and it may be). But from an investment standpoint, you have to pay a far richer valuation for that strength -- about 23 times earnings, to be exact.

Meanwhile, the 14-times earnings multiple of Procter & Gamble is roughly half of where shares traded on average over the past 15 years. That should make you smile.

And let's be real here: Even though growth isn't what it used to be, these consumer staples aren't exactly hurting. Looking at Procter & Gamble's average analyst estimates over the next few years hardly shows a picture of a company facing doom and gloom:

Fiscal Year

EPS Estimates

2010

$4.11

2011

$4.05

2012

$4.73

2013

$4.74

Source: Capital IQ, a division of Standard & Poor's.

Earlier this month, Procter & Gamble management said organic sales growth would come in at 1%-4% next quarter. In prior years that would have been a pittance of growth, but it's nonetheless impressive in light of consumers' new spending behavior.

Some of that growth comes from new pricing measures that focus consumers' attention on value. But long-term growth potential comes from international operations that, unlike the U.S., are in countries still growing at a good clip, and have burgeoning middle classes craving the kind of simple luxuries that Procter & Gamble provides.

A-ha!
Speaking of international sales, exposure to non-dollar currencies is another attribute that plenty of top-quality consumer staples hold:

Company

2008 International Sales as a Percentage of Total Sales

Campbell's Soup (NYSE:CPB)

20%

Clorox

21%

Johnson & Johnson (NYSE:JNJ)

49%

Procter & Gamble

62%

Colgate-Palmolive (NYSE:CL)

75%

Philip Morris International (NYSE:PM)

100% (hence the name)

The advantage that international operations provides can't be expressed enough.

Look, I'm not from the camp that thinks the dollar's going to turn into toilet paper overnight. But I do think the basic factors at hand -- massive expansion of the Federal Reserve's balance sheet, trillion-dollar deficits, and reliance on foreign investors to buy our debt -- carves a pretty clear path for the greenback over the long haul. As the dollar weakens, the value of international sales increases for investors like you and me who price our investment returns in dollars. Owning companies with substantial earnings power in non-dollar currencies might go down as the single most important factor to achieving superior investment results in the coming years.

Onward
Summing it up, consumer staples are in somewhat of a perfect storm: It's an industry that's easy to hate in light of the state of consumers; by and large it's priced at a valuation not seen in years; many of the top names derive lots (if not most) of sales from overseas, giving one of the best dollar hedges you could ask for. Gold doesn't pay a dividend, you know.

Agree? Disagree? We want to hear your thoughts either way. Feel free to share your comments below.

Fool contributor Morgan Housel owns shares in Procter & Gamble, Johnson & Johnson, and Philip Morris International. Clorox, Johnson & Johnson, and Procter & Gamble are Motley Fool Income Investor recommendations. Philip Morris International is a Global Gains pick. Costco is a selection of Stock Advisor and Inside Value. The Fool owns shares of Procter & Gamble and Costco, and has a disclosure policy.