Top 7 UK stocks to Watch in 2021 for the long-term
Are you looking to enter the UK stock market in 2021? Are you wanting to discover which top UK stocks are worth investing in for the new year and in for the long haul? We have the top-performing UK players for you to consider in 2021 and into the future.
Before we take a closer look at these best UK stocks for 2021, here are our top picks:
1. AO World Plc (AO)
2. Vodafone Group Plc (VOD)
3. Premier Foods Plc (PFD)
4. Taylor Wimpey Plc (TW)
5. Burberry Group Plc (BRBY)
6. JD Sports Fashion (JD)
7. Ocado Group Plc (OCDO)
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There’s no question about it, 2020 has been a year in which no one could have predicted.
In light of this year's significant challenges and devastating outcomes, 2021 is not only around the corner but is welcomed with open arms as it is set to becoming the comeback year for businesses across the globe.
Although the stock market is used to surprises here and there, as it delivers both positive and negative news for traders and investors alike around the globe, this surprise factor in 2020 has been a big one.
Two factors have played a huge part this year, one which is the obvious and one which has controlled our world as we know it unexpectedly, Covid-19.
Along with the second key factor being included within the UK and the UK stock market, Brexit.
As we go into the new year both key factors will carry on playing a leading part into 2021 as companies keep adapting to the new changes in both the short and long-term.
Businesses who have been able to adapt to the new normal measures which have been forced upon us by Covid-19, including brands that have been within consumers financial reach, have naturally been the top-performing UK stocks in 2020.
But in light of the vaccine news, 2021 is looking set to be the comeback year for the businesses that have been hit tremendously hard across all industries, as the UK economy starts the eagerly awaited healing process.
However, we are not in the clear just yet.
The start of 2021 is going to be furtherly restricted across the nation due to Covid-19 safety measures, potential further lockdown periods and the rise in redundancies being made across the country, as the globe will be witnessing mass vaccinations being enrolled out.
As the UK draws closer to a Brexit deal, companies are also spending their time addressing the impacts that they are currently or will be facing along with what 2020 has brought.
Along with the hopeful positive news of the deadly virus being controlled by the new vaccine, the UK has experienced other positive factors too. Businesses across the nation have experienced and shown successful figures within their annual reports and are predicted to carry forward their success stories leading into 2021 and beyond.
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So let’s head straight in to explore the UK’s top 7 best-performing stocks of now and leading into 2021 and further.
7 Best performing UK stocks for 2021 and beyond
This year, along with essential-retail shops has been a year for the technology industry, e-commerce industry and the property market, to name three.
But as we dive into the top UK stocks that have a strong performing background, despite this year's challenges, has also caused most of the UK’s top-performing stocks to underperform, we are also not ruling these stocks out either as those stocks are gaining momentum and set to do well moving into the future.
So let’s start with 7 UK top stocks to be a part of in 2021 who are great potential stocks to add to your portfolio along with keeping a hold of these big brands for the foreseeable.
Best UK Stocks To Look For In 2021:
- AO World PLC (LON: AO)
- Vodafone Group Plc (LON: VOD)
- Premier Foods Plc (LON: PFD)
- Taylor Wimpey Plc (LON: TW)
- Burberry Group Plc (LON: BRBY)
- JD Sports Fashion (LON: JD)
- Ocado Group PLC (LON: OCDO)
1. AO World PLC (LON: AO)
For those who may not have heard of AO World, now is the time to get familiar with this British electrical retailer.
Headquartered in Bolton, Greater Manchester and founded in 2000 by John Roberts, has since been listed on the London Stock Exchange and is a leading player within the FTSE 250.
With a market cap of £1.93 Billion and its revenue going from strength to strength, this electronic retailer is not only proving its ability to become one of the strongest electronic retailers in the present but also leading into 2021 and further.
Being the UK’s largest online-only electronic and white goods retailer, is setting the standards high and for any competitors looking to come in the equation, they are going to have to offer something special to be in the same category as this brand.
As well as the brand operating from within the UK with its award-winning customer service team running alongside, the company also operates in Germany.
Another unique selling point and a huge attraction for the company is that the business is doing its part to providing a greener environment as it is the owner of Europe’s sophisticated fridge recycling plant.
In the company’s FY21 Interim report, it was confirmed that the company’s growth grew with tremendous results.
From April to September 30th the company saw a 53.2% increase in total revenue growth to £717.0 million up from 2019 within the same period brought in £468.2m.
A fantastic result from the UK and German consumer demand in light of recent events.
And it hasn’t stopped there for the glowing company.
The company also reported its Group Profit before tax figure which came in at £18.3 million which came from a loss of £5.9m in 2019.
In a financial breakdown, the company showed an 85.2% movement in revenue from its German market, which is proving to be an unstoppable force.
Founder and Chief Executive Officer, John Roberts expressed his thoughts on this year’s results and the reliance moving into the future:
“This has been a half year like no other. I believe our market has changed as a result, forever. Online is now the dominant retail channel for customers and manufacturers alike and I am delighted by how our AOers have risen to the challenge of this structural shift in behaviour.”
Further additional comments expressed that the Group has taken “huge strides forward” in fixing and strengthening its European presence.
As the European side of the business has now been turned upside down to a profitable platform, which is set to “accelerate in growth” across Germany and continuing across the UK and potentially beyond.
As the company’s share price is on the rise, alongside its spectacular results this year and set to finish with, makes this company one UK stock to buy in for 2021 but to keep a hold as it grows into the future.
2. Vodafone Group Plc (LON: VOD)
The British multicultural telecommunications company whose presence is felt across various continents including Asia, Africa, Europe and Oceania is on its way to gaining more of the recognition it deserves.
Vodafone has had its ups and downs over the years, with this year being no different for the company.
But things are potentially taking a turn for the better going into 2021 and in the long-term for the business for numerous attractive reasons.
The company's share price has been fairly low over the years, but leading into 2021, the potential room for growth is huge for the UK telecom company.
In the companies first financial report, the telecom group reported revenue of £19.2 billion (€21.4bn) within a six month period ending in September 30th.
It was reported €3 billion of the company’s revenue came from its UK market with the remaining coming from other continents where the company trades.
As this year saw the world move quicker and at a fast speed into the digital world, the demand was apparent from consumers who were slowly adapting to the enforced working from home measures.
Due to new measures, the numbers from customers taking out mobile contracts were reportedly up by almost 145,000.
The company’s big ambition is to “improve one billion lives and halve our environmental impact by 2025” to which the company is gaining the strength to archive this ambition.
5G is the latest addition to telecom companies, to which the company has received rave reviews with being one of the best and strongest network providers for its 5G addition.
Taking this year's challenges into consideration, Vodafone from the start of the year up until August had seen its revenue grow by 3%, its EBITDA up by 2.6% and the company’s free cash flow increased by 4.7% to €5.7 billion.
As we get ready to head into 2021, analysts have predicted good results for the company for the next year which will potentially spiral further in the coming years, all being well.
Although Vodafone is showing volatility, there are still many positives to take away and be a part of.
With the company’s achievable ambitions, its increase in revenue and its positive demand across various continents, Vodafone is a UK stock that stands out to be a part of the long-haul.
3. Premier Foods Plc (LON: PFD)
Premier Foods is home to some of Britain’s most popular and most loved brands which include Mr Kipling, Angel Delight, Bird’s Custard and many more top name brands.
With such top brands under its wing, Premier Foods graces the FTSE 250 with its consistent revenue year-over-year as the sales soar within each brand under the name.
2020 has been a year for essential retail businesses as they saw sales increased and still increasing which showed revenues soar, and PFD was one of the top performers.
As the nation has entered multiple national and local lockdowns, the company's final Group revenue result is set to be astonishing as mid-way results have already shown the rise.
As of September, the brand revenue was up by 18.6% in the first half of the year to £367 million. Followed by a whopping figure of £40 million which was cleared from the company’s net debit which now stands at £429 million.
As more people across the nation have and still continue to bake and cook within the comfort of their own homes, has had an “exceptional” positive effect for the brand stated the Chief Executive Officer, Alex Whitehouse.
Moving forward as uncertainty still continues into 2021, the demand for the popular products is set to be still as popular as this year, as the strict safety measures are potentially going to remain in place for a while longer yet.
Whitehouse spoke on the year-end results for the company advising “We anticipate that the trading profit for the full year will be ahead of current market expectations”.
As brokers and analysts are anticipating the brand’s popularity to continue to spiral, believing that the current measures will still be in place (at least for the start of the year) will improve not only the company’s yearly results, but the long-term growth potential.
As the share price stands at 102.20, this is one UK food stock to buy going into 2021 and set for fantastic growth in the long-term as customers continue to indulge in the popular food brands that we love.
4. Taylor Wimpey Plc (LON: TW)
One industry within 2020, apart from your obvious businesses, has been a year for housebuilding companies within the property industry, along with the property market itself.
Along with Persimmon, Taylor Wimpey has had a challenging year, however, the company has its footings set firmly with its positive financial position and is looking set to have a bright long-term future.
This year has seen Taylor Wimpey’s share price being a cheap one to buy, starting from the bottom 100’s which to date has risen to 161.50 due to the demand within the property industry.
As the demand for homes is apparent across the nation and with the lack of being available, including low interest rates and the stamp duty holiday which is in play up until March 2021, is looking to carry on its great run going into 2021 and for the long run.
In the first half of the year, Covid-19 brought all industries to a halt and placed all operations on pause, causing the vast majority of industries including the property industry to experience saddening dry spells.
As the weeks developed and government measures started to ease slightly across the nation, saw the property industry making a slow move.
Meanwhile, mortgage rates came to a historic low, hand-in-hand with the announcement from the government confirming the stamp duty holiday started to see the consumer demand being strong.
The firm's latest trading update report sees a strong balance sheet and cash flow. With an expected net cash balance between £500 million - £750 million.
As the demand and recovery have dominated the property industry within the second quarter, it is surpassing all expectations.
The company is already looking to hit the top of market expectations with the firm's revenue.
With the housing market in demand and going from strength to strength, the company has also anticipated to see their land position plot increase by around 10k plots in the coming 12-18 months.
Along with its strong presence within the UK property market, the homebuilders also hold a presence in Spain which has been a slower recovery due to a ban and restrictions of international travel.
However, the company is looking for it to normalise within the new year, in light of the vaccination news.
With an estimated 85-90% complication rate set for 2021 along with a strong order book moving into the new year with continuing customer demand, proves that Taylor Wimpey is setting its sights on great success within 2021 and for more years to come.
Which is why TW is one of the top UK stocks to buy for the long-haul.
Along with Taylor Wimpey, Persimmon is also a top-performing UK stock which is set for a strong 2021.
Here we have broken down and shared the property businesses positives taken from this year which is set to bring in good results for the future, along with 9 other top performing UK stocks for you to look to buy in for 2021.
We have it all covered and leaving no stone unturned in your UK stock trading journey.
5. Burberry Group Plc (LON: BRBY)
Burberry, the luxurious high- end fashion retailing brand who continues to draw in revenue from all across the globe, even in uncertain times.
Although the fashion brand has not had a shining year, to say the least, like many companies across the globe is leading forward into 2021 and looking at the companies proven track record, this is the reasoning as to this stock coming on the list as one of the top UK stocks to buy in 2021 and beyond.
The popular fashion brand not only has a strong demand within the UK, but holds a long-reining demand from within the brand's Asian market.
Despite the global pandemic crisis, fashion is one industry that never goes out of style. As for the iconic trademark design, the Burberry Group have proven to be popular amongst all working-classes.
With a market capitalisation of £7.397 million, the Burberry Group is looking to grow with its current strategy as advised by the company’s Chairman, Dr Gerry Murphy and CEO Marco Gobbetti.
From the company’s 2019/20 yearly annual report, it shows that this year due to the Covid-19 outbreak has had a big effect on the company.
The company stood at £2.6 billion in revenue which is down by 3% and the reported that operating profit was down by 57% in March.
To date, the company is still behind on where they wanted to be due to the pandemic.
However, at the start of the year as the majority of the world started to go into tougher lockdown measures, mainland China and South Korea started reopening and experienced a “positive growth” according to the annual report.
As the world pushes to become more digital, Burberry has a strong demand through its online presence, which within the summer saw the brand keeping their spring/summer stock available longer than expected to enable customers to purchase these seasonal designs online to make up for lost revenue.
Leading into the start of the new financial year, Burberry’s aim is to carry on evolving and spreading its British uniqueness across various continents. With continuing success within the Asian market.
With the hope of normality coming back in 2021, Burberry is seeking to climb back up the ladder with their sales, with a big portion of the brand’s sales coming from travelling consumers.
Which makes the brand a UK stock to buy and be a part of in 2021 and into the future.
6. JD Sports Fashion (LON: JD)
JD Sports, the British sports fashion retailer that is having a glowing year despite the effects that Covid-19 has sprung on the retail industry.
The sports retail powerhouse has not only been delivering the results within its brand, the company are also looking to broaden their horizons of expanding their name, as recently were linked to the potential purchase of the fashion retailer, Debenhams.
Until negotiations ended at the start of December due to the added devastation of that Acadia group had fallen into administration who held and played a key part in the Debenhams Groups revenue.
Which was proven to be too much of a big risk to take for the sports company.
With a market cap of £7.65 billion and shares moving year-over-year to around 7.30%, the brand is not doing badly at all considering.
JD’s stock rose by 147% over the past year, the sports brands net income fell by a reported 6%. Although, the sports brands revenue has increased to £6.11 billion GBP within 2020 from $4.72 billion at the start of the year.
Noticeably, JD’s share price is one to be known to be high, it has room most certainly to rise back up.
In light of the UK government lifting the local lockdown measures across the country, we can see this popular sports retailer showing even greater results as we edge closer to the festive period.
As stores open across the nation and worldwide, which include over 600 stores dotted across the globe and not to forget the company's strong digital income, this retail brand is one stock to look to buy and keep a close on in 2021.
7. Ocado Group PLC (LON: OCDO)
Last to come in on our list, is Ocado Group PLC is a British online supermarket who prides itself on being a ‘non-traditional supermarket’.
The online retailer sends its deliveries straight from the company’s warehouses without having its supermarket presence felt with a chain of stores across the nation.
The online grocery company has seen a significant rise in its revenue which was documented within its latest report, which ended up until November 29th.
A retail revenue of £579.6 million up over £100,000 from the previous year's results of just shy of £430.0 million.
2020 has arguably been a breakthrough year for the company, not because they have performed poorly in the past but in light of this year's happenings the company has become more well known to consumers with its Covid-19 adaptable measures.
Providing its uniqueness with produce coming directly from the company’s warehouses is vastly becoming the e-grocer to look out for as we head into the new normal.
With the company’s share price holding up at an impressive rate, although it has had its moments of volatility and with its sales gaining in strength, there is no wonder investors are keeping a close eye on this blossoming UK stock.
With Brexit around the corner, it’s naturally leading investors to have their concerns. Not just within this industry but across the board as a collective.
But what impact will Brexit have on Ocado Group PLC?
The long and short of it, Brexit will have an impact on the company of course but it may only be short-lived in comparison to companies within other industries.
As fresh production comes into the warehouses from various countries around the world, this could hold up or see the company’s growth become slower due to the lack of production and also the wait in which it may take to arrive at its warehouses.
But in all honesty, it will more than likely not cause a big problem for the company in the long-term and realistically the company is more than likely one step ahead with this potential issue that could cause a delay.
As mentioned above, the world is becoming more and more digitally run by the day. Which for the long-term impact, is fantastic for this growing company as the world adapts to the new normal of the popular on-demand digital world.
Not only is the company leading the way with its digital e-grocer presence, the brand also partnered up with M&S, one of the UK’s top luxury food companies which increased the company’s growth by 52% in August.
With the outlook looking set for brilliant long-term investment, alongside its brilliant revenue results it has shown this year, this company is set to be one of the companies leading into the new future and definitely one to be a part of in 2021.
Another Popular UK Stock to Watch in 2021
Boohoo Group PLC (LON: BOO)
Boohoo, the online-fashion retailer has had a mixture of it all this year including its share price almost trebling within its peak.
The fashion retailer is popular amongst most generations who offer the latest styles and trends and its key attraction, the brand's affordable fashion.
At the start of the year the fashion brand took a hit at the start of the pandemic however, the brand soon gained momentum being a leading digital performer as lockdown measures restricted individuals from shopping in retail stores.
Although Boohoo’s share price can be unpredictable, the company has grown over the past 5 years and looking into 2021 is set to grow even further with spectacular results investors are predicting.
The company’s share price currently stands at 311.80 per share which analysts are advising that it is a steal as the potential room for growth that is visible for the company to archive in the future, is the motivation not only to buy but to keep this stock in your portfolio.
Despite the media backlash surrounding the brand’s factories in Leicester this year, which saw the company being thrust into the spotlight and being labelled with neglecting and underpaying its staff.
The company’s CEO, Mahmoud Kamani addressed the reports and additionally added that he is focusing on Leicester’s performance rather than expanding the brand into other continents.
According to the August reports, the company is up by 44.54% year-over-year to £408.25 million despite the global pandemic and investigations into the ethnic background of the brand.
Along with the company’s revenue, its net income, it's net change in cash and all other financial areas within the brand, all currently stand in the green.
With the brands financial figures showing the way for the company, along with positive feedback from analysts and its attractive share price, makes Boohoo a stock to buy in 2021 and looking to provide growth in the long-run.
And there you have it, 7 of the top UK stocks set to bring you a brighter future within 2021 and beyond which also provide a good variety to your expanding portfolio.
Alongside the positives, it’s important to mention that all businesses come with their own risks as there is no guarantee when investing.
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- Top 7 best UK stocks all come with both exceptional positives but balance with their own risk factors.
- Besides the best UK stocks mentioned above, keep an eye on the UK stock market as there are more exceptional companies that could ‘boom’ within 2021.
- Before investing, it’s wise to conduct further research into your chosen stocks.
- Practice makes perfect and is a great way to understand and learn the trading world before investing your own money.
- Always invest wisely, in simpler terms invest with your means.
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Please Note: Past performance is not an indication of future performance. The value of investments can go down as well as up. Any opinions, news, research, analyses, prices, or other information contained on this website are provided as general market commentary, and do not constitute investment advice. Trading Education shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information provided.