Many companies became extinct during the 1930s, but the companies that survived helped to build the U.S. into the greatest industrial nation to date. I’m kind of a history buff, and I truly enjoy reading about the origins of companies and how they evolved. In addition to annual reports, Wikipedia usually provides an interesting history of old companies.

It is surprising how many of our current U.S. companies were founded more than 150 years ago. One of the oldest is Bank of NY, founded in 1792. CIGNA, JP Morgan, DuPont, Colgate Palmolive, Hartford Financial, Procter & Gamble, Tiffany, Pfizer, Aetna and American Express are a few of the companies that continue to prosper.

I get great satisfaction investing in big-name well-respected companies. If you buy when a company’s stock declines to a reasonable price and then hold your stock until it becomes clearly overvalued, you can enjoy steady gains with minimal risk. And the good companies pay generous dividends that usually rise every year.

Today, I especially like PepsiCo and Procter & Gamble.

PepsiCo didn’t arrive on the scene until 1898, which makes it a “newcomer,” but the company has prospered for 111 years and has survived a recession or two. Both Pepsi and P&G are run by astute management teams that perpetuate the great successes of the past and innovate and expand to ensure that their companies will be around for many more years.

PepsiCo (PEP), incorporated in 1919, is a global leader in the soft drink and snack food industries.  PepsiCo’s popular brands include Pepsi, Frito-Lay, Gatorade, and Quaker Foods (acquired in 2001). PEP derives 65% of total sales from North America, while 35% comes from the rest of the world.  The company is beating its competition by expanding in international markets and focusing on health and wellness beverages and foods.

Pepsi management has created faster growth by reacting more quickly to new growth trends in the industry.  Bottled water (Aquafina), fruit juices (Tropicana and Naked Juice), and nutritious snacks (Quaker oatmeal and granola bars) are growing noticeably faster than traditional carbonated soft drinks and conventional snack foods.

Indra Nooyi has been the chief executive of PepsiCo since 2006. Her focus has been on healthier snacks with net-zero impact on the environment. Ms. Nooyi calls her philosophy: “Performance With Purpose.”

Sales decreased 2% and earnings per share improved by 5% during the first nine months of 2009 compared to a year ago.  Sales and earnings per share will likely increase by 15% during the next 12-month period.  PEP’s dividend yield is attractive at 2.9%, and the dividend has been raised every year for 37 years.

Pepsi is a bargain at 15.9 times next 12-month EPS.  The company is top-notch and operates in a stable industry.  I expect PEP to outperform the stock market during the next several years as the company rolls out new products, acquires companies with good growth potential, and gains market share overseas.

Procter & Gamble (PG) was founded in 1827 by William Procter and James Gamble as a soap and candle company. Management is committed to providing products and services of superior quality and value. The company has become the leading consumer goods company in the U.S. and now makes and sells a wide variety of household products and personal care items. Leading brands include: Head & Shoulders, Olay, Dawn, Tide, Bounty, Charmin, Pampers, Iams, Pringles, Braun, Duracell and Gillette. That’s a heck of a line-up of diversified products.

P&G has created a long history of consistent revenue and earnings growth. The company’s acquisition of Gillette in 2005 has produced modest sales and earnings growth to date, but an aggressive restructuring program is aimed at cutting costs, improving profit margins, and focusing on faster-growing products. Great profit opportunities exist at Gillette. I’m confident P&G will unleash these opportunities during the next few years.

P&G sells 60% of its goods outside the U.S. The company is expanding its international operations further by focusing on rapidly growing overseas markets. Sales and earnings were down slightly during the latest 12-month period, but I expect EPS growth of 10% during the next 12 months. PG shares sell at a modest 14.5 times EPS with a dividend yield of 2.8%. The current low price offers an excellent opportunity to buy a premier company that’s been around for 182 years and counting.