Investors in consumer-products stocks should shift their portfolios to more defensive stocks with less leverage in 2009, Bank of America Securities-Merrill Lynch told its clients Tuesday.

Paper-tissue maker Kimberly-Clark Corp. (KMB), and personal care-product maker Alberto-Culver Co. (ACV) are good examples of more defensive, less levered stocks, BAS-ML analyst Christopher Ferrara said in upgrading the stocks to buy.

Battery maker Energizer Holdings Inc. (ENR) and Newell Rubbermaid Inc. (NWL), however, are too highly leveraged, Ferrara said. He downgraded Energizer to underperform and Newell Rubbermaid to neutral.

Shares of Alberto-Culver rose 6% to $24.50 in recent trading and Kimberly-Clark rose 2.3% to $51.71. Shares of Newell Rubbermaid fell 3.5% to $9.71 and Energizer fell 5% to $51.59.

Ferrara said Kimberly-Clark, whose stock price has lagged the S&P 500 by 26% since mid-November, will benefit from a decline in paper pulp prices.

Alberto-Culver has the best balance sheet among personal-care companies with nearly $4 per share in cash and no debt, Ferrara said, and its sales of hair-care products, making up nearly 80% of its product portfolio, have held up well and should continue to do so, he said.

Ferrara's downgrade of Energizer was based on part on the stock's 72% jump since its Nov. 20 lows. He also said the company's leverage ratio was near the high end of its peers, and its valuation shouldn't expand "for quite some time" due to a lack of visibility and the difficult economic environment.

Ferrara said he expects Newell-Rubbermaid to cut its dividend in its upcoming fourth-quarter earnings report and said the company's BBB+ credit rating on negative watch will be a deterrent for buyers.

-By Ed Welsch, Dow Jones Newswires; 201-938-5244; edward.welsch@dowjones.com

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary. You can use this link on the day this article is published and the following day.