Should you take a bite of these tasty ASX shares?

There are several food-related ASX shares, should you take a bite of any of them? One of the considerations is Collins Foods Ltd (ASX:CKF).

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There are plenty of food-related ASX shares that are available to invest in.

Here are some of the businesses that the Motley Fool investment team have taken a look at:

Collins Foods Ltd (ASX: CKF)

This company is a large franchisee of KFC restaurants across Australia and Europe (in Germany and the Netherlands).

During FY20 in Australia the company saw revenue growth of 9.5% with same store sales growth of 3.5%. The company has been investing in its digital and delivery systems so that it can continue to serve customers during this COVID-19 period. The company is also expanding in Australia with Taco Bell outlets.

However, in Europe, Collins Foods saw revenue growth of 8.3% with a decline of same store sales of 5.8%.

Overall in FY20, the company generated revenue growth of 8.9%, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 6.3% and underlying net profit went up 5.1% to $47.3 million.

The food ASX share is focused on expanding its Taco Bell network, whilst expanding its delivery network in Australia.  

Collins Foods is currently rated as a hold by the Motley Fool Dividend Investor service.

Costa Group Holdings Ltd (ASX: CGC)

Costa is the largest horticultural business in Australia. It grows a variety of different produce including tomatoes, avocadoes, mushrooms, citrus fruit and berries.

The company has been affected by drought and other one-off issues such as fruit flies and crumbly berries. Costa said the historical weather conditions should have no material impact in the second half of the year or beyond and there is broad based forward momentum in demand and pricing over its Australian portfolio.

The food ASX share reported growth in its FY20 half-year result which showed revenue growth of 6.8% to $612.4 million, underlying EBITDA grew by 13.7% to $93.7 million and underlying net profit went up 12% to $45.8 million.

Costa’s international segment, which includes Morocco and China, saw underlying EBITDA growth of 98% compared to the prior corresponding period.

The company believes that strong export and domestic demand, together with improved pricing levels, are expected to continue to the end of the season.

Costa continues to invest for growth with better facilities at some of its farms and whilst planting more hectares.

The company now has “excellent” water security and it’s expecting an increase in quality, yield growth and shareholder returns.

Costa is currently rated as a buy by the Motley Fool Share Advisor service.

Rural Funds Group (ASX: RFF)

Rural Funds is an agricultural real estate investment trust (REIT) which owns a variety of different farm types including cattle, almonds, macadamias, vineyards and cropping (sugar and cotton).

Many of its tenants are large businesses including Olam, Treasury Wine Estates Ltd (ASX: TWE), Select Harvests Limited (ASX: SHV) and Australian Agricultural Company Ltd (ASX: AAC).

Rural Funds doesn’t carry the operational risks of the farms, that’s down to the tenants. However, the food ASX share does own a large number of water entitlements for tenants to use if necessary.

The REIT has rental growth built into all of its tenancy agreements which are based either of a fixed 2.5% annual increase, or linked to CPI inflation, with some contracts having market reviews.

The management of Rural Funds aim to increase the distribution to shareholders by 4% per annum. At the current Rural Funds share price it has a FY21 distribution yield of 4.2%.

Rural Funds is currently rated as a buy by the Motley Fool Dividend Investor service.

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Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO, RURALFUNDS STAPLED, and Treasury Wine Estates Limited. The Motley Fool Australia has recommended Collins Foods Limited. 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 Scott Phillips.

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