Consumer companies' outperformance no longer guaranteed by cheap oil

* Low oil prices lift spending less than before-CEOs

* Consumer goods stocks have outperformed since '08

* Many reaching peak multiples

By Martinne Geller

LONDON, Feb 12 (Reuters) - Consumer companies are offeringinvestors a small degree of relief from the turmoil in bankingand resources in a results season dominated by fears aboutslowing economic growth.

But those companies say lower oil prices no longer translateinto a traditional boost for spending on their products becausehouseholds are using the money saved at the gas pump and onenergy bills to stash cash, pay off debt or on other items.

This means those companies may not be as much of a safehaven investment as they used to be in times of low commoditiesprices or economic stress.

Since 2008, food and beverage stocks have offered a 142percent total shareholder return, nearly double that of themarket overall, according to Thomson Reuters global equityindices. Since the start of the year, they have lost 3.4percent, versus 12 percent for the global index.

"In the context of a market that's in meltdown, theperformance consumer goods has been delivering is pretty good,"said Jefferies analyst Martin Deboo.

Consumer stalwarts PepsiCo, Unilever andFrench cosmetics firm L'Oreal all reportedbetter-than-expected revenue in contrast to dismal results frombanks including Credit Suisse and Deutsche Bank

and oil, gas and mining firms. Tobacco companyPhilip Morris International gave a strong outlook andliquor giant Diageo reported improvements.

There have also been good results from General Motors, Adidas and Norwegian Air, andanalysts are on the lookout for similar trends next week inreports from Nestle, Michelin, Puma and Royal Caribbean Cruises.

Consumer confidence has risen in the United States andEurope, nearing 2007 levels, and car sales, which analysts calla good proxy for discretionary spending, are showing promise ofstaying healthy in 2016.

UNPREDICTABLE

But companies need to work harder to win over consumers,according to PepsiCo Chief Executive Indra Nooyi.

"In the past, we used to say when gas prices came down thereused to be a perceptible increase in convenience store traffic,"Nooyi told analysts this week. "Yes, we did see an increase inconvenience store traffic (of about 6 percent), but I think thatgame has played out. Now it's going to be how much innovationyou put on the shelves and how you execute."

L'Oreal Chief Executive Jean-Paul Agon said he was surprisedby the lack of any fuel-related benefit.

"When I ran L'Oreal US ten years ago, every 10 cent, or 20cents less in the price of the gas translated immediately intomore consumption," Agon said. "We started the year, last year,with the idea that the reduction in the price of gas wouldprobably mean an acceleration of the consumption ... andhonestly, we did not see it at all."

"We did not see it in America, we did not see it in WesternEurope. So we don't have some precise explanation about it.Maybe some people are doing more savings or spending money onother categories."

With global oil consumption around 95 million barrels perday, the drop in prices from $115 per barrel in June 2014 toaround $30 now has resulted in savings of about $8 billion perday for oil importers, said Laith Khalef, senior analyst atHargreaves Lansdown Stockbrokers.

"That's a pretty big stimulus to those oil consumers, but wehaven't really seen it yet," Khalef said. "That's a theme thatperhaps is not being played out in the market.

Part of the reason the fuel price benefit is more muffledthan in previous cycles, analysts say, is because consumers arepaying down their own debt, uncertain about their future wagegrowth. Another reason is that there are more things to spendmoney on that are not tracked by traditional measures, such asonline home-sharing service Airbnb or car ride service Uber.

"The consumer has arguably been swinging his money around,and is not consistently going anywhere," said Liberum analystRobert Waldschmidt. "This month it's at the retail outlets, nextmonth it's at the cinema and maybe after that it's a new app."

HIGH PRICE FOR GROWTH

Consumer staples stocks, which include Procter & Gamble and Anheuser-Busch InBev, have been trading athistorically high multiples, anywhere from 18 times earnings tomore than 30 times, buoyed by the fact that they are stable,have decent yields in a low interest rate environment andexposure to emerging markets, which up until recently, weresignificant offsets to weak mature markets.

Even though they have tempered their forecasts in the wakeof the downturn, they are still seeing top- and bottom-linegrowth, and many investors are prepared to pay up for that,especially with so many other sectors sinking.

"They (investors) are saying 'Look the world is terrible, I'mgoing to lose money in most places. I'm prepared to pay a highprice to be confident for a little bit of growth'," said AliMiremadi, fund manager at THS Partners in London which ownsshares of Unilever, Nestle, Pepsi and Mondelez International.

"These are all fundamentally strong companies, whichassuming you are going to hold them for a reasonably long periodof time, are very reasonably valued."

Still, valuations do reach a point -- somewhere around 30times earnings -- where it's harder to justify owning a stockthat is delivering only single-digit revenue growth, Miremadisaid.

Consumer staples do nevertheless offer income, which maybecome more scarce as companies such as miner Rio Tinto scrap their dividend payout policies.

With dividend payout ratios in the 80 to 90 percent range,tobacco stocks like Philip Morris and British American lead the pack of consumer staples with yields of 4.5 percent.

"Things could be going better, but if people are looking fordefensive qualities and income from their equity investments,staples gives you both of those on a fairly reliable basis,"said Morningstar analyst Philip Gorham.

(Additional reporting by Tom Pfeiffer in London, DominiqueVidalon and Astrid Wendlandt in Paris; editing by Anna Willard)