ConAgra, other food company stocks getting unfairly punished on fears of higher rates, Deutsche Bank says

ConAgra Foods products
Daniel Acker | Bloomberg | Getty Images

Investors might be mistakenly unloading consumer staples stocks on the belief that higher interest rates from bonds will compete with the dividend yields of these companies, according to Deutsche Bank.

"Our analysis shows zero correlation between interest rate movements and absolute performance of Staples over the past 20 years," equity analyst Rob Dickerson wrote in a research note Wednesday.

Conventional wisdom says that when U.S. interest rates increase, investors often rotate out of consumer staples in favor of higher beta discretionary names that could grow at a faster pace along with the economy.

That belief, however, could be deceiving as historical data do not support that claim.

Deutsche Bank tells clients to focus on food companies, a segment of consumer staples that have positive valuations and appears ripe for continued consolidation through mergers and acquisitions.

More In Pro News and Analysis

CNBC ProMike Santoli’s market notes: Buying energy wanes, immaculate rotation, casino action
CNBC ProStock market live updates: Dow falls over 100 points, IBM and Intel slide, winning week for Wall Street
CNBC ProHow Twitter stock could fare without Trump