Food is an integral part of our everyday life. Everyone must eat, which gives the food producers a certain amount of defensive qualities to their earnings.
Not all food is equal in the supermarket, some are high quality and expensive. Not all food shares on the ASX are priced equally due to their growth prospects.
Here are four shares that could cook up a storm:
Expensive tastes
Costa Group Holdings Ltd (ASX: CGC) is the fresh food producer that grows various food types including tomatoes, berries, mushrooms, citrus fruit and avocados.
The business has large expansion plans in Australia, China and Morocco. This is why it's currently trading at 61x FY16's earnings with a grossed-up dividend yield of 2.95%. As long as my fellow millennials keep consuming smashed avo on toast in vast quantities, this stock could be a long-term winner.
Domino's Pizza Enterprises Ltd. (ASX: DMP) is the pizza mogul with more high-tech ideas underway than most NASDAQ businesses. Delivery robots and drones could both be part of Domino's service at some point in the future.
I'm excited by Domino's shares because of the large growth plans management has for the business. Management expect to expand its global network to over 4500 outlets over the next decade.
It's currently trading at 36x FY17's annualised earnings with a partially franked dividend yield of 1.67%.
Bargain bites
Select Harvests Limited (ASX: SHV) is one of Australia's largest almond producers, but it has seen its share price roasted like an almond from $13 to $4.90 over the past two years.
Warren Buffett has said it's a good idea to be greedy when others are fearful. In this case, he means being greedy about buying shares when they have fallen.
Select Harvests has been on a bit of a rollercoaster over the last decade but the low price could mean now is the time to buy. It's currently trading at 30x FY17's estimated earnings with a trailing grossed-up dividend yield of 10.2%.
Tassal Group Limited (ASX: TGR) is Australia's largest salmon farmer, its farms are based in the perfect conditions of Tasmania's waters.
Australians are generally eating a little better than we were a decade ago, so Tassal is seeing an increase in sales.
Tassal's fish may be a fairly high-priced item but its shares are trading cheaply at 13x FY17's estimated earnings with a grossed-up dividend yield of 5.62%.
Foolish food takeaway
I think all four of these businesses have a good chance of beating the market over the next five years. At the current prices, I think Domino's and Select Harvests are the best value, although I'd really like to own shares of all four in time.
