The Best Consumer Staples Stocks to Buy Now: Kimberly Clark Corp (KMB), The Clorox Company (CLX), Colgate-Palmolive Company (CL)

With the Dow Jones Industrial Average having recently broken through its all-time high, and the S&P 500 not far behind, contrarian investors might be looking for ways to get defensive. In times like these, when markets march higher and attractively valued stocks are hard to find, it’s a good idea to look at stocks that are defensive in nature—meaning should the market experience a correction, their shares won’t suffer too much. Specifically, the consumer staples sector is known for including companies that sell products to consumers no matter the prevailing market conditions. With that in mind, here’s a few great consumer staples stocks to consider if you’re leery of the market’s new highs.

The best offense is a good defense

Many of the market’s best performing stocks over time come from industries that would likely surprise most investors. Business models that include products like paper towels and soap certainly won’t make headlines as the next big growth stories. What those business models do offer, however, is consistency: the products that consumer staples companies sell can be found in virtually every home in America, and are bought no matter where the stock market is trading, or the health of the housing market.

Kimberly Clark Corp (NYSE:KMB) is a consumer products giant with a market value north of $36 billion. The company holds classic American brands such as Kleenex, Huggies, and Cottonelle. Full-year adjusted earnings per share were $5.25 in 2012 compared to $4.80 in 2011, and came in at the top end of the company’s previous guidance of $5.15 per share to $5.25 per share. Furthermore, 2013 is expected to be a good year, with adjusted earnings per share in 2013 forecasted to fall within a range of $5.50 per share to $5.65 per share, up 5%-8% year over year.

Kimberly Clark Corp (NYSE:KMB) trades at a reasonable forward P/E ratio of 16 times. In addition, the company guided investors to expect dividend growth in the high single digits going forward.

Kimberly Clark Corp (KMB)

The Clorox Company (NYSE:CLX) has a portfolio of strong, market-leading brands, including its namesake bleach, as well as Kingsford charcoal and Hidden Valley salad dressing. Nearly 90 percent of the company’s brands hold the number one or number two market share positions in their categories. Recently, the company reported second-quarter growth figures more befitting of a technology stock than a company that sells bleach.

Clorox reported a 9% increase in sales and 18% growth in diluted earnings per share in the second quarter. The Clorox Company (NYSE:CLX) also delivered one percentage point of gross margin improvement during the quarter. The company’s first half of the year was equally impressive, reporting 5% sales growth and 10% earnings per share growth through the first six months year over year.

In addition, The Clorox Company (NYSE:CLX) provided investors with an updated and improved fiscal 2013 outlook. Previously, the company expected sales growth of 2%-4%, and diluted earnings to be within a range of $4.20 per share to $4.35 per share. Now, expectations are for 3%-5% sales growth and diluted earnings per share to fall between $4.25 per share and $4.35 per share.