2 growth stocks I'd buy and hold for 20 years

While many of its publican rivals like Greene King have witnessed a sizeable takings slowdown in recent times, JD Wetherspoon(LSE: JDW) revenues performance has been pretty darn impressive.

And latest trading details released on Friday again underlined the broad resilience of the business.

In the 26 weeks to January 28, Wetherspoons saw revenues edge 3.6% higher, to £830.4m, or an impressive 6.1% on a like-for-like basis. This perky result helped interim pre-tax profit to soar 20.6% to £62m.

The cut-price food and drink chain isn't totally immune to the growing pressure on consumers' spending power, however. In the six weeks to March 11 it saw sales growth slow to 2.6% (or 3.8% on a like-for-like basis). But this isn't the only issue to trouble the company's colourful chairman Tim Martin.

He commented: "The company anticipates higher costs in the second half of the financial year, in areas including pay, taxes and utilities. In view of these additional costs, and our expectation that growth in like-for-like sales will be lower in the next six months, the company remains cautious about the second half of the year."

Goes down a treat

Yet there are a number of reasons that Wetherspoons can expect to continue delivering chubby profits growth.

Firstly, the relative cheapness of its booze and pub grub should allow it to weather the toughening economic conditions better than the rest of the sector. Britons' love of a night out isn't going to end even if Brexit pressures persist, and Wetherspoons could actually benefit from the current environment should drinkers trade down from more expensive establishments.

On top of this, its mobile app launched a year ago that allows drinkers to order at the table and thus avoid those painful queues at the bar, has already proven a hit and should also keep underlying sales chugging higher.

City analysts believe Wetherspoons has what it takes to keep delivering solid earnings growth and are forecasting expansion of 3% and 2% in the years to July 2018 and 2019 respectively.

A forward P/E ratio of 17.8 times may be a tad heavy on paper, sailing above the accepted value territory of 15 times or below. But I believe Spoons' proven toughness in tough trading conditions makes it worthy of this modest premium.

Picture perfect

As I say though, the pub chain isn't without its degree of risk. So those not liking the cut of its gib may want to check out another growth hero I've identified today, The Vitec Group (LSE: VTC).

The camera and broadcasting equipment maker has seen its share price detonate over the past 12 months as investors have bought into the company's transformation strategy. Earnings have grown by double-digit percentages in recent times, and City brokers are expecting this trend to continue, a 17% advance being chalked in for 2018.

A 7% rise is forecast for next year, although I see the chances of this figure being revised up as its raft of industry-leading, high-margin technologies rolls off the production line and its hunger for acquisitions continues (it snapped up imaging products manufacturer Adeal of Australia for £2.8m just last week).

Vitec changes hands on a forward P/E rating of 15 times. This is a bargain considering that its strong and evolving product portfolio should underpin sterling profits growth for many years to come.

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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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