Kellogg spends a healthy 12% of sales to support its brands via advertising and marketing, versus an average of 6% to 9% for rivals. In a recent client note, Morgan Stanley analyst Vincent Andrews carries a $60 target, citing Kellogg's "superior operating fundamentals, superior innovation capability, broad-based market-share growth and substantial financial flexibility."

It's strong in some of the most attractive food categories, including cereal, ice cream, yogurt and organic foods. General Mills' Yoplait is the No. 1 U.S. yogurt brand, and the company also owns Häagen-Dazs ice cream. The stock, now at 55, trades for about 16 times projected profits of $3.44 for the fiscal year ending in May. General Mills pays a secure 2.8% dividend and has been an active buyer of its stock. Given its relatively low P/E, and dividend and buyback support, the stock could move back into the low 60s this year.

When activist investor Nelson Peltz took a stake in Heinz in 2006 and agitated for change, the company initially resisted. Then it added Peltz to its board and followed much of the Peltz playbook, including cost-cutting, more brand spending, a higher dividend and increased share buybacks. At 42, the stock trades for 16 times projected earnings in the fiscal year ending in April. Heinz's latest quarter was strong, with organic sales up 8% and 20% growth in earnings per share. One plus is that Heinz gets half its sales from abroad, including 10% to 15% in the developing world. Investor Mark Boyar, head of Mark Boyar & Co., says Heinz could top 50 in the next year and become a takeover target.

"Kraft is poised for a turnaround," says McMillin of Lord Abbett. The stock now trades for 15 times estimated 2008 profits of $1.90 and yields 3.7%. McMillin thinks Kraft can earn $2.50 a share by 2011. Profit margins, at 12%, have been cut nearly in half since the IPO, and probably won't go lower.

ConAgra's profits have been lifted by a commodity-trading and sales division that has done well lately. Analysts worry about a lack of transparency in that business, but a similar issue hasn't hurt Bunge (BG), a hot agricultural play. Bulls say the stock could hit the high-20s by year-end.

Its U.S. soup business remains a challenge and accounts for the weakness in the stock, which has fallen to 32 from last winter's high of 42. Campbell Soup gets 25% of its sales, and a higher percentage of earnings, from domestic soups. Rival Progresso has been more innovative and has gained share at Campbell's expense. Campbell's modest goal calls for 5% to 7% annual growth in per-share profits, which makes it less exciting than Kellogg or General Mills. Campbell may have bottomed, however, at 15 times projected profits of $2.08 in its fiscal year ending in July.

The company has long commanded the sector's highest price/earnings ratio, owing to its No. 1 rank in the global gum market and its superior earnings growth. But Wrigley may not be worth such a big premium even with its stock at 55, down from a high of 69. Shares trade for 22 times estimated 2008 profits. Wrigley is well entrenched overseas but faces a strong competitive challenge from Cadbury Schweppes (ticker: CSG), which has gained market share at Wrigley's expense in the $19 billion gum business. Wrigley has targeted earning-per-share growth of 9% to 11%, not much better than Kellogg, which has a lower P/E.

Hershey has seen its stock drop to 35 from 56 last spring and has lost its reputation as one of the best-run food companies. It is paying the price for insufficient spending on marketing, and disappointing initiatives in snack foods. Rival Mars continues to gain market share. Hershey is the only major food company whose profits are heading south -- to an expected $1.85 to $1.90 a share, down from $2.08 in 2007 and $2.37 in 2006. The stock might not be a bargain, however, because Hershey's P/E, at 19, is above the group average. Its chocolate and confectionary franchise has scant international exposure. A takeover is possible, but the controlling Hershey Trust hasn't been interested in a sale, and buyers in the food industry typically avoid turnaround candidates.