2 quality AIM stocks I'd buy on any dips

The Alternative Investment Market (AIM) has a reputation for attracting companies of dubious quality. In reality of course, things really aren't that bad. While some businesses have justifiably gone to the wall over the years, others have positively thrived. After all, let's not forget that AIM houses some of the UK's most recent success stories, including fast fashion retailers Asos and Boohoo, litigation specialist Burford Capital and -- until very recently -- polyhalite miner Sirius Minerals.

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With this in mind, here are two more AIM-listed stocks that could be excellent additions to most growth-focused portfolios, if purchased at a reasonable price.

Waiting on the sidelines

Whether you like or loathe what it produces, soft drinks maker Nichols(LSE: NICL) scores highly when it comes to generating consistent rises in revenue and profits -- a fact not lost on investors. Over the last year, shares have fizzed 35% higher.

In its recent AGM update, Nichols reported that Q1 trading had been in line with expectations with UK sales of Vimto up 3.4% compared to the same period in 2016. This was encouraging given the 1.2% growth managed by the total soft drinks market.

On a somewhat downbeat note, the company was cautious in its outlook for the rest of 2017 thanks to the rise in inflation impacting on "an already price competitive environment". Concerns over the sugar tax are also likely to persist. Personally, I suspect the latter may be overdone and the popularity of Nichols' low ticket items should remain fairly constant thanks to strong branding and geographical diversification. As far as the latter is concerned, sales in Africa and the Middle East continued to be robust in preparation for Ramadan beginning at the end of May.

While the share price has dipped over the last couple of weeks, the stock still trades on an expensive-looking 24 times 2017 earnings. As such, I'm prepared to keep my hand away from the buy button for just a bit longer.

Healthy gains

Thanks to a very encouraging set of interim figures, shares in chocolatier and retailer HotelChocolat(LSE: HOTC) have soared 53% since mid-February.

For the 26 weeks to Christmas Day 2016, revenue rose 14% to £62.5m with profit before tax rising 28% to £11.2m. A total of 10 new stores were opened over the six months, contributing 4% to top line year-on-year growth. Thanks to a significant increase in online transactions and popular new ranges, the "critical" Christmas trading period was also very successful for Hotel Chocolat.

While operating margins at the £432m cap may not be the largest (7% in 2016), investors should feel comforted by the relatively high levels of return on capital achieved by management over the last couple of years. A net cash position to the tune of £16.2m -- compared to the £14m of net debt on the books less than two years ago -- is yet another positive.

The only problem with all this good news is that the shares now trade on a gravity-defying price-to-earnings (P/E) ratio of 52, reducing to 46 in 2018 assuming earning growth estimates are hit. Even with its huge potential, that's still a lot to pay for a stock that's as susceptible to adverse exchange rates, raw materials prices and a slowdown in consumer spending as any other retailer.

Like Nichols, Hotel Chocolat remains on my watchlist for now.

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Paul Summers has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.