The consumer staples sector consists of companies which produce products that many of their customers view as essential, such as food, drinks, tobacco, and household items. These are products that experience constant demand during economic downturns, which makes them solid defensive plays for uncertain times. Let's focus on two stocks in this sector which are standout performers -- Altria Group (NYSE:MO) and Tyson Foods (NYSE:TSN).

Altria Group
Many investors avoid tobacco stocks because smoking rates are dropping worldwide. In the U.S., the smoking rate among adults declined from 42% to 18% between 1958 to 2012.

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Source: Pixabay.

Yet shares of Altria Group (NYSE:MO), the largest tobacco company in the U.S., have surged 150% over the past five years. Its annual earnings per share rose 37% between 2010 and 2014, even though annual revenue increased by less than 1%. The reason is simple -- Altria keeps raising prices and cutting costs to preserve its bottom line growth.

That sounds like an unsustainable business model, but Altria still has plenty of room to raise prices. The average price per pack of cigarettes across all 50 states was just $5.76 (including taxes) in 2013, according to figures from the CDC. Meanwhile, smokers in Australia and the U.K. -- which have comparable adult smoking rates as Americans -- pay double that amount or more.

Altria has several other notable strengths. First, its flagship Marlboro brand controlled over 40% of the domestic cigarette market last year. Altria generates all its revenue from the U.S., which shields it from the currency fluctuations which are hurting its overseas counterpart, Philip Morris International (NYSE:PM). Altria is also diversifying away from cigarettes with other products, like snuff, cigars, wine, e-cigarettes, and a stake in brewery SABMiller. Sales of those products only accounted for 7% of Altria's top line last year, but their weight could eventually increase. Altria also pays a hefty forward annual dividend yield of 4.2%.

Tyson Foods
Just as smokers keep lighting up regardless of the state of the economy, people will also keep eating meat. Shares of Tyson Foods -- one of the world's largest protein processors of chicken, beef, and pork -- surged nearly 160% over the past five years. 

Between 2010 and 2014, Tyson's annual revenue rose 32% and earnings per share improved 15%, fueled by a growing global population with an insatiable appetite for meat.

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Source: Tyson Foods.

Tyson's core strength is its ability to offer three kinds of meats throughout the entire year. Demand for chicken, beef, and prepared food products like hot dogs generally rises during the spring and the summer and declines in the winter. Demand for pork and other prepared foods -- like frozen pies and breakfast sausage -- climbs in the winter and falls in warmer weather. This also means that Tyson can offset lower prices on one type of meat, usually caused by rising supplies, with higher prices on another. That diverse portfolio also protects Tyson from certain animal diseases -- like mad cow, swine flu, and avian flu -- which only impact sales of one kind of meat.

Last year, Tyson acquired Hillshire Brands, the maker of Jimmy Dean sausages and Ball Park hot dogs, for $7.7 billion. That move, which bolsters its prepared foods services business, is expected to generate $250 million in cost-cutting synergies for Tyson this year. Tyson also announced the sale of its operations in Mexico and Brazil to Brazilian food giant JBS last year.

As a result, international sales only accounted for 2.2% of Tyson's top line last quarter, versus 3.6% a year earlier. This means that like Altria, Tyson is a solid play on the stronger U.S. dollar, and also pays a forward annual dividend of 0.9%.

Cigarettes, chicken, and non-cyclical plays
Cigarettes and meat are considered "non-cyclical" plays which don't go through discretionary income-driven peaks and troughs. When the economy is chugging along, these stocks get passed over for more exciting growth plays. But now that problems in China and Greece are spooking investors, stocks like Altria and Tyson Foods could be considered better defensive investments.

 

Leo Sun owns shares of Altria Group,. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.