A key part of our three-part investment approach is to stick with well-established, dividend-paying companies. (The other two parts are to spread your money out across the five main economic sectors, and downplay stocks in the broker/public-relations limelight.)

Most well-established companies have built up strong reputations that can help them overcome the inevitable downturns. Their trusted brands also make it easier for them to launch new products, or expand into new markets.

Wall Street stocks: Heinz’s strong brands give it a solid foundation

H.J. Heinz Co. (symbol HNZ on New York) is a good example. The company started operating in 1869, and owns some of the best-known brands in the food industry. Its strong brands are helping it expand in fast-growing markets, like China and India. Moreover, Heinz’s $1.80 annual dividend yields a high 3.6%. And it continues to raise its dividend yearly.

We’ve updated our buy/sell/hold advice on the company in a just-published issue of Wall Street Stock Forecaster, our newsletter that focuses on the U.S. markets.

Heinz makes a wide variety of processed foods, including condiments, sauces, soups, baked beans, pastas and infant food. The Wall Street stock’s flagship product, Heinz Ketchup, accounts for about 60% of U.S. ketchup sales.

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The company continues to expand its main brands, including Ore-Ida (frozen potatoes), Classico (pasta sauces) and Weight Watchers (diet foods). Its top 15 brands each generate sales of over $100 million. Together, they supply 70% of Heinz’s total sales.

Cost cuts help fund this Wall Street stock’s overseas growth

Heinz plans to cut costs by a total of $1 billion over the next five years. It aims to achieve this by improving productivity, including installing uniform computer systems. It will also buy more raw materials in bulk.

The savings from this plan will help Heinz absorb rising costs for ingredients, including wheat and corn. The savings will also help pay for the company’s push into China and other fast-growing markets.

Right now, these markets account for 15% of Heinz’s sales. The company aims to raise this to 25% by 2016, and eventually to 35% to 40%.

Part of the company’s growth strategy involves buying food companies in overseas markets. For example, Heinz recently agreed to pay $165 million for privately held Foodstar, a leading soy sauce maker in China. Heinz is also developing new products for these markets, including an infant formula that it will soon launch in China and Russia.

Heinz also aims to spur sales by spending more to promote its products. In 2010, it spent 21.3% of its sales on advertising, up from 20.6% in 2009.

You can get our full analysis, including clear buy/sell/hold advice, on Heinz and 24 other U.S. stocks in the latest Wall Street Stock Forecaster. What’s more, you can get this issue absolutely free when you subscribe today. Click here to learn how.