The food sector has been on a rollercoaster in recent months, particularly stocks like Select Harvests Limited (ASX: SHV), Tassal Group Limited (ASX: TGR) and Capilano Honey Ltd (ASX: CZZ). These companies are leveraging off Australia’s changing food palette, but also Asia’s middle class too. Are any of these food stocks worth a bite?

Select Harvests 

Select Harvests is one of the world’s largest growers of almonds and last year it produced 14,200 tonnes of almonds.

The almonds it sells are a commodity just like the iron ore that miners sell. The movement in almond prices is the biggest factor in Select Harvests’ changing performance. In FY15 the average almond price was $11.45 per kilo. In FY16 it was $8.08 per kilo. This translated into a 53% drop in profit from $59.4 million in FY15 to $29.7 million in FY16.

Select Harvests has a goal of producing 15,000 tonnes of almonds this financial year, which would translate into a growth of 5.6% more almonds to sell.

It has a trailing fully franked dividend yield of 7.02% and is trading at 14x FY16’s earnings.

Tassal Group 

Tassal is Australia’s largest salmon farmer and one of Tasmania’s biggest businesses.

In Tassal’s latest results it revealed that its fish stock’s value had increased by 10.4% to $246.1 million. Tassal’s salmon is becoming more popular each year and as a result of that it increased its operating profit by 8.3% last year, with the dividend growing by 7.1%.

There have been concerns with the salmon farms in Macquarie Harbour after a competitor alleged that Tassal’s farms are being overstocked. Investors should monitor that short term gains aren’t taking priority over the long term consequences.

Tassal is currently trading with a price/earnings ratio of 11 with a fully franked yield of 4.01%.

Capilano Honey 

Capilano is Australia’s largest provider of honey. It has been ramping up its sales to China, which increased its Chinese revenue by 56.9% in the latest results.

It prides itself on selling 100% pure Australian made honey, which is a good selling point for Australian and Chinese consumers alike.

Having grown its profit by 20.8% and its dividend by 5.3% last year I think there’s a good chance Capilano can keep growing well in the coming years.

It’s trading with a price/earnings ratio of 14 and a fully franked dividend yield of 2.18%

Time to buy?

There will always be a certain amount of demand for food products, particularly Australian produced products. All three businesses have room to grow due to increased Chinese demand and Australian diets becoming more health conscious.

Out of the three, I think Capilano looks like the best buy with its undemanding valuation and its rapidly increasing exports to Asia.

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Motley Fool contributor Tristan Harrison owns shares of Select Harvests Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.