Over time, consumer-staples stocks tend to modestly plug along, delivering dependable dividend income along with steady, but often limited, capital appreciation. My top consumer-staples pick for 2010, however, defies that profile, offering investors a potential 50%-plus return.

Allow me to introduce packaged-foods niche player Smart Balance (NASDAQ:SMBL). Specializing in a line of patented, heart-healthy buttery spreads, this young company may at first glance look like an industry lightweight. Net sales in 2008 amounted to $222 million -- peanuts compared to the billions that a General Mills (NYSE:GIS) or Kraft (NYSE:KFT) hauls in every year.

Smart Balance, however, is a growth story. The company holds a leading presence in the spreads category, outpacing popular brands offered by such heavy hitters as Unilever (NYSE:UL) and ConAgra (NYSE:CAG). Specifically, its category market share has expanded for 31 consecutive quarters, currently lagging only Unilever, which competes under the Country Crock and I Can't Believe It's Not Butter brands. Such success no doubt owes to Smart Balance's deep executive bench: Its management brings experience from previously held positions at Dean Foods, PepsiCo (NYSE:PEP), and ConAgra, among other posts. 

Of course, small, fast-growing companies often come with burdensome debt levels and spotty cash flow. But in the case of Smart Balance, investors can sit back and enjoy a buttered muffin sans indigestion. Thanks in part to a capex-light operating model that outsources all production and distribution, the company has positive free cash flow. That, in turn, has helped management more than halve debt over the past few years, to a current level of roughly $61 million. To top things off, a recent refinancing deal allowed the board to authorize a two-year stock buyback equal to roughly 6.5% of the current market cap.

Cream of the cream
When I previously profiled Smart Balance in March of this year, I was moderately upbeat on the company's prospects, but cautious on the stock's valuation. With shares now trading slightly higher, my judgment may be a topic of concern. Quite simply, Fools, the company has outperformed my expectations.

First, management's foray into the nutrient-enhanced milk category has gone off swimmingly: Smart Balance milk has quickly captured 38% and 10% of category dollar share in Florida and New York, respectively. A national rollout is now scheduled for the first quarter of 2010. Beyond the obvious benefits to the top line, that should help boost the company's overall brand awareness to more competitive levels.

Regular readers know that I often favor consumer-staples companies that can effectively compete in the value segment. And that's my second reason for warming up to Smart Balance. Having recently acquired the food and beverage rights to the popular Best Life lifestyle brand, the company will soon launch a Best Life-endorsed line of value-priced spreads and sprays, which will take bragging rights as the only value brand free of partially hydrogenated oils. The move helps, uh, balance the company’s exposure to a broader range of consumers, and it fits nicely with the value proposition touted by its largest retail customer, Wal-Mart Stores (NYSE:WMT).

Does Smart Balance face risks? You bet. I've written about potentially higher dairy costs in 2010, which could crimp profit and pressure sales of the new milk products. (The company does hedge its milk costs.) Also, I expect competition in the spreads category to only increase over time, and management may need to extend or even increase recent promotional activities, thus eating into margins.

Ultimately, I believe Smart Balance's risks are priced into the stock. Analysts expect earnings before interest, taxes, depreciation, and amortization (EBITDA) to increase 166% this year, and 16% in 2010, followed by a 28% move in 2011. Put a well-deserved multiple of 15 on next year's estimated EBITDA, and you've got a stock that's nearly 50% above current levels.

That, Fools, is a healthy return.

Which is the best stock for 2010? See all 13 candidates here.

Smart Balance is a Motley Fool Rule Breakers recommendation. Wal-Mart is an Inside Value pick. PepsiCo and Unilever are Income Investor recommendations. Unilever is a Global Gains choice. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Mike Pienciak owns shares of Smart Balance, but holds no financial position in any other company mentioned in this article. The Fool has a rich, buttery disclosure policy free of hydrogenated oils.