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We have Stop & Shop and Shaw's, but in Israel the most successful supermarkets are run by Blue Square-Israel Ltd (NYSE:BSI), which trades on the markets both in Tel Aviv and New York. BSI is coming off the best year in its history, and the stock has been rising pretty steadily since the fall. I think there's more room for growth, and that this is an excellent company for the long term.

Despite the constant political tension, Israel's economy has been booming, and BSI has been benefiting from this upswing. Revenues for 2006 were up 12% over 2005, while gross profit was up 13.6% and operating income was up 33%. This is despite the two-month war last summer, and I believe the numbers should keep growing while Israel's economy keeps growing.

Blue Square is the largest supermarket chain in Israel, and it has several different types of stores that appeal to the different markets it serves. Its margins are the envy of the industry, and with solid management, it's succeeded in growing steadily. There's always the risk of something catastrophic happening in Israel, but I think this is a good bet for the long term, and the dividend of 4% doesn't hurt either.

Type of stock: A foreign supermarket company that also trades on the NYSE -- a bountiful way to invest in Israel's booming economy!

Price target: BSI is currently trading at $17.50, just off its 52-week high. The stock stumbled a bit in February, but has regained its footing. With the nice dividend, I think you can take a chance on this one to keep climbing above $18.

BSI 1-yr chart:

BSI

Source: Blue Square-Israel: A Bountiful Investment in Israel's Booming Market