Blue chip stocks are well-established companies that have demonstrated their financial strength through good times and bad. They typically pay dividends, and are considered to be less risky, based on their historical patterns.

There are many blue chip stocks in the consumer sector. Typically, the strongest of these companies sell staples, like soap, beverages and soup, that consumers must buy no matter what the economy is doing.

Strong consumer blue chip stocks share a number of characteristics. These include geographic diversity (which helps protect them from regional economic problems), a record of rising cash flow and a strong balance sheet.

(Below, we review a consumer stock that matches up well with all three of these requirements. Read on for full details.)

The spike in commodity prices that preceded the recession forced many consumer blue chip stocks to make deep cost cuts. This ended up helping them because it put them in a good position to expand production and profit during the recovery. In many cases, it has also freed up cash for expanding or upgrading facilities, and raising dividends.

We believe that a record of rising dividend payments is a good indication of a strong company, especially in a weak economy. This cuts your risk. In addition, you get paid dividends and earn income for as long as you hold these stocks.

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Heinz: A consumer-sector standout that’s looking overseas for growth

We’ve covered H.J. Heinz Co. (symbol HNZ on New York) for some time in our Wall Street Stock Forecaster newsletter, which focuses on the U.S. stock markets. The company is a good example of a strong consumer stock. Its $1.68 annual dividend yields a high 3.89%.

Heinz is a leading maker of condiments. The blue chip stock’s flagship product, Heinz ketchup, makes up about 60% of all ketchup sold in the U.S. Heinz also makes frozen potatoes (under the Ore-Ida brand), pasta sauces (Classico) and diet foods (Weight Watchers).

The company is looking to grow by expanding overseas. It now gets about 60% of its sales from outside of the U.S. And it’s making strong gains in emerging markets, such as Mexico, India and Russia. That’s helping offset lower sales to restaurants in the U.S.

Heinz’s international growth has helped it lately, as the falling U.S. dollar has enhanced the contribution of its overseas sales. Its growing overseas presence does add currency risk in the long term, but its strong growth in emerging markets should help offset this. Moreover, the company is benefiting as more people choose to eat at home because of the weak economy.

You can get our latest buy/sell/hold advice on Heinz and dozens of other U.S. blue chip stocks when you become a subscriber to our Wall Street Stock Forecaster newsletter. Click here to learn how you can get one month free when you subscribe today.