1 FTSE 100 growth stock I'd buy and hold forever

Despite the release of upbeat trading details, confectionary colossus Hotel Chocolat Group(LSE: HOTC) still saw itself sliding on Wednesday.

Currently trading around 330p per share, Hotel Chocolat is now trading 4% lower on the day and at levels not seen since late October. It has now shed 13% of its value over the past fortnight, and it is not difficult to see why given the negative tone of recent retail sales data.

The Office for National Statistics was the latest body to chip in last week, the organisation advising that retail revenues in the UK dived 1.5% in December from the prior month. This was also the biggest drop for 18 months as rising prices and stagnating wage growth caused shoppers to tighten their pursestrings.

I should cocoa

There seems little doubt that these conditions look likely to persist through 2018 and possibly beyond, a scenario that could dent demand for Hotel Chocolat's sweet treats. But so far the chocolate star is managing to largely defy the wider pressures crushing the broader high street.

The AIM-quoted retailer today advised that "trading since December continues to be in line with management's expectations," and that total revenues in the 13 weeks to December 31 rose 15% year-on-year.

Chief executive Angus Thirlwell commented: "Constant innovation saw our largest-ever seasonal range in Christmas 2017 and we maintained strong availability of products to capitalise on the last-minute rush, without any excess stock overhang." He paid tribute to the success of its Supermilk Pure no-added-sugar chocolate range, as well as its brand new cocoa beauty products.

Hotel Chocolat opened 10 new stores in the second half of 2017 -- taking the total in the UK to 100 -- and these new outlets contributed 6% of its sales growth in the final 13 weeks of the year, the company commented.

Too expensive?

Now City analysts believe that the Hertfordshire business will keep vaulting the gloom washing over much of the retail sector to punch earnings growth of 15% and 17% in the years to June 2018 and 2019 respectively.

But one has to remember that these positive forecasts still leave Hotel Chocolat dealing on a forward P/E ratio of 36.1 times. This leaves plenty of scope for fresh share price weakness should sales growth begin to cool, and particularly around the critical Easter period.

Footsie favourite

Hotel Chocolat could still prove a wise long-term pick, of course, thanks in no small part to the massive investment it is making in boosting its store estate as well as its digital channel.

But risk-averse investors may be better served by checking out FTSE 100 giant RSA Insurance Group (LSE: RSA) today.

City brokers are expecting earnings here to swell by 30% year-on-year in 2018, and by an extra 7% in 2019. But unlike Hotel Chocolat, RSA can be picked up for next to nothing, the insurer sporting a modest forward P/E reading of 12.2 times.

This is particularly cheap given the excellent revenue opportunities in its core British marketplace as well as its Scandinavian, Canadian and Irish overseas units. The Footsie firm commented in November that underwriting results across these foreign territories have continued to exceed expectations.

What's more, RSA provides an added bonus in that it is also expected to remain a lucrative dividend bet in the near term and later -- yields clock in at 4.9% for this year and 5.7% for fiscal 2019.

Get 2018 started with this dividend star

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Royston Wild has no position in any of the 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.

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