Crude oil prices are at three-year lows, falling more than 20% since late June on weak demand from China and abundant supply from U.S. shale production. A strong U.S. dollar and Saudi Arabia’s price cuts for crude exported to the United States have deepened the decline.

Analysts don’t see prices rebounding any time soon. The International Energy Agency (IEA) in its latest forecast cut its 2014 and 2015 estimates for oil demand growth, saying prices would be pressured by over-supply.

The selloff in some oil and gas stocks could continue until prices establish a base over the next year or two. What’s an investor in Canadian stocks to do when energy stocks, such as Enerplus, account for roughly 25% of the TSX Composite Index?

Not to worry. There’s a silver lining. Oil prices lost more than 20% since September 2013, while the S&P 500 gained almost 20% and the S&P/TSX rallied 13%. The inverse correlation is not coincidental. Low fuel prices help jolt the economy by serving as a tax cut to businesses and individual consumers.

For example, the recent decline in gasoline prices from an average $3.68 a gallon to around $3.00 a gallon is estimated by motor club AAA to save consumers some $250 million a day. The savings could help spur consumer spending on other products.

The boon that low fuel costs provide to the economy explains why falling oil prices have historically been positive for every sector except energy. In the four periods that oil prices have fallen for more than six months over the past 30 years, the S&P 500 has rallied more than 80% of the time, according to research by Bespoke Investment Group.

It’s not surprising, then, that consumer staples, such as food stocks, is the top-performing sector in Canada’s benchmark S&P/TSX Composite Index. With year-to-date returns of 29%, this sector has out-paced the country’s benchmark index nearly three-fold.

With this in mind, we screened for consumer staples stocks that trade on the Toronto Stock Exchange, yield at least 4%, and have positive year-to-date returns.

Given that the average yield for this sector is only 1.4%, it’s not surprising that we found only two stocks that met our criteria: Ten Peaks Coffee (TSX: TPK; OTC: SWSSF) and Premium Brands Holding Corp. (TSX: PBH; OTC: PRBZF).

Both look to be growing earnings at an accelerated pace, but we honed in on Premium Brands given its market capitalization of $520 million versus Ten Peaks’ $30 million and its average trading volume of 20,000 shares a day versus Ten Peaks’ 4,000 shares.

Founded in 1917, Premium Brands is a Vancouver, Canada-based food products manufacturer and distributor that has been going strong for nearly 100 years.

Serving the bulk of Canada and three states in the United States, Premium Brands services more than 22,000 customers through an extensive network of nine autonomously run food distributors and 25 specialty product brands. About 60% of revenues are from retail sales and 40% from product distribution. As well, about 80% of the revenues are generated in Canada, with 20% coming from the United States.

Premium Brands pays a 5.3% dividend and has grown the payout an average 2% a year over the past three years.

While Premium Brands holds a diverse food and beverage portfolio, all its holdings operate under one unified goal: to consistently earn higher profit margins by providing specialty foods to a diverse customer base.

This mission is first achieved by appealing to customers on factors other than price. Food must, therefore, be high quality, convenient or healthy. By taking price largely out of the equation, Premium Brands avoids directly competing against larger-scale, mainstream food suppliers primarily focused on price point.

Second, Premium Brands offers unique services and products that stand out from competing distributors who are primarily focused on logistics. For example, the company sets itself apart from its rivals by offering chef specific menus that utilize in-house, custom meat cutting facilities, merchandising and inventory management services or equipment maintenance and leasing programs.

The company’s strategy is successful. Over the past five years, revenues rose an average 22% a year, while earnings before interest, taxes, depreciation and amortization (EBITDA) gained an average 14% annually.

Earnings growth was achieved mainly by acquiring new brands for its product line and expanding production facilities. In 2013, about 60% of revenue growth came from acquisitions and 40% from organic expansion. The company purchased interests in four food retail and manufacturing businesses in 2013 and began expanding three existing production facilities.

Revenues for 2013 rose nearly 12% to C$1.1 billion and adjusted per-share earnings grew 7% to C$1.01. (Adjusted earnings excludes one-time items such as acquisition costs and unrealized currency gains or losses.) At year-end 2013, long-term debt was a still sustainable 2.1 times EBITDA.

In the most recently reported second quarter, total revenue rose 16% to C$322.3 million compared with C$278.9 million in the comparable year-earlier period. Retail revenue increased 17% due to product and customer growth in Canada and the United States. Food service and distribution revenue increased 14% from the year-earlier period as a result of organic growth and the successful acquisition of Reddi Foods. Adjusted earnings per share of C$0.28 were down 20% from C$0.35 a year-ago, as higher beef prices and restructuring costs in the deli division offset sales growth.

To continue driving growth, the company is focused on acquiring new specialty food businesses that offer diverse or high-quality foods. Analysts polled by Bloomberg expect adjusted earnings to rise 6% to C$1.07 in 2014 and escalate 49% to C$1.59 in 2015, as acquisitions and plant expansions kick in.

Two capital projects that are on track for the coming year are a new US$21.6 million sandwich plant and C$14.1 million in deli meats capacity expansion projects. Selling-price increases and improved pork and beef prices should also boost the bottom line as weather conditions stabilize.

Premium Brands is attractive on several measures. Its 5.3% yield is well above the 1.6% for its North American food-industry peers. A trailing price-to-earnings (P/E) ratio of 23 is steeply discounted to the industry average of 32. And a forward P/E of 15 times estimated 2015 adjusted earnings is equally discounted to the industry average of 22. That said, the shares may carry above-average volatility, given the company’s market capitalization is about 10% of the $5 billion industry average.

Risks To Consider: Risk factors for this processed food company include rising food prices, the strength of the Canadian dollar versus the U.S. dollar and shifts in consumer eating trends.

Action To Take –> This stock offers a generous 5.3% yield even after the shares have rallied 9% this year. Analyst expectations for strong earnings growth over the coming year could push the shares higher. For investors willing to ride the potential volatility of a small cap stock in return for a rich income stream and strong capital gains potential, Premium Brands is worth considering.

Each month StreetAuthority’s premium newsletter High-Yield International highlights some of the best Canadian investments, like Premium Brands, in a column called Northern Lights. However, Canadian investments are just a fraction of the most lucrative international stocks available. In fact, if you’re ignoring overseas markets, then you could be missing out on some of the market’s biggest income opportunities. All told, we’ve found 93 companies paying 12%-plus yields — and nearly a thousand more paying above 6%. For more information about High-Yield International and to get access to issues of Northern Lights (like the excerpt above), click here.