Top 10 UK Stocks To Invest In 2021 (In-Depth Review)
Top UK stocks to Consider in 2021
Are you a beginner looking to start your journey into UK stocks in 2021? Or maybe you are an investor looking to buy the top-performing UK stocks in 2021.
Either way, we have it covered for you with a breakdown of the UK’s top 10 stocks that have performed well in 2020 and set for success leading into 2021.
You can buy all of these top stocks in the UK, as well as many others, at eToro and pay 0% commission!
So without further ado…
The UK’s top 10 best-performing stocks:
Before we take a closer look at these best UK stocks to invest in 2021, here are our top 10 picks:
Best U.K. stocks to invest in 2021
The UK, like the rest of the world, has seen a devastating and difficult year due to the Covid-19 pandemic which has sadly taken over everything.
Being the first western country in the world to distribute the vaccine to prevent coronavirus, the vaccine is now officially being enrolled out across the nation to the most vulnerable and to the frontline key workers who are at greater risk.
In light of the recent historic event, it is giving hopes not just to millions of British citizens but for the rest of the world if the vaccine is proven to be effective for the long run.
Businesses within the UK have witnessed and have had a challenging couple of years, before the coronavirus pandemic took over this year.
Prior to 2020’s events, Brexit has been the talk of conversation over the past four and a half years and with the discussions set to be finalised within the coming weeks (depending on when a deal can be reached).
Brexit has and is causing many challenges for businesses across the country within various sectors. Forcing disruptive challenges to businesses and to further for some to incur irreparable damages caused by the Brexit deal along with Covid-19 which is leading many to severe complications or for some even worse effects, permanent closers.
The UK stock market out of all of the leading stock markets has sadly been the hardest hit and in effect has been the most unpopular.
The FTSE 100, the UK’s biggest index which has some of the largest companies under its wing for market capitalisation, is down by almost 14% this year, and in comparison to the other global markets across the world, is not doing as well as they hoped.
The New York Stock Exchange (NYSE) within the US market and even Germany's DAX, who is 0.1% down, have proved that the UK has not been a hit for investors this year who seem to have focused their attention on other countries across the globe instead.
Chancellor Rishi Sunak has expressed in his statements on the UK economy that the UK economy will decrease by around 11.3% within 2020, which of course is a significantly big and sad loss for the UK.
However, although this year has not been the most positive UK and for the UK stock market, there are still many positives that have come to light despite all of the difficulties and challenges.
And the one obvious positive is of the one mentioned above, the enrollment of the vaccine which is underway as of Tuesday 8th December. Which is a huge drive for the UK and for the UK stock market.
As two of the most well-known sayings go, the only way is up from the bottom and there is always room for improvement as businesses set their sights on the new year ahead.
Whilst the good news is more than welcomed to help prevent this deadly virus, the reality is that the UK is still within the strict tier systems implemented across the nation.
As the restrictions are causing difficulties to various businesses and with the daily figures still on the high side, along with the Brexit discussions, it's naturally causing investors to be nervous or even worse as proven, seen investors wait until they feel it is the right time to enter the stock market.
But in the present, now is in fact a brilliant and opportune time to start being a part of the UK stock market leading into 2021.
As we look at the top best performing UK companies, these companies have not only fared well this year (given the circumstances), but they are set to be the top performers leading in 2021 and beyond.
If you are new to trading stocks within the UK or new to stock trading in general, we have it covered for you. Our article How to trade stock and How to Survive stock trading is a must-read. Enabling you to get a clear and full understanding on how to start and survive your stock trading journey, along with a step-by-step guide for you to accomplish your goal in trading stocks.
Before we step into exploring the top 10 UK best-performing stocks, here is some additional and vital information into the UK stock market.
What is the UK stock market?
The London Stock Exchange (LSE) is the main stock exchange within the United Kingdom. Its physical presence is also within the city of London located near St Paul's Cathedral which is also the largest and the oldest stock exchange within Europe.
Spanning over 300 years and drawing in thousands of financial gurus, investors and traders yearly, the UK stock exchange is arguably one of the top and best stock exchanges in the world.
Having the largest European presence, LSE's biggest rival is the New York Stock Exchange (NYSE) as both have similar elements in terms of market capitalisation and trade volume to name just two elements.
As one of the hub’s for international trading as it is commonly referred to, holds the Financial Times Stock Exchange or most notable abbreviation FTSE or “Footsie”. FTSE is a dominating index and home to over 100 blue-chip stock companies who tower within the UK stock market.
As the leading international stock exchange, LSE exchanges with thousands of companies in over 60 plus countries in the world.
The LSE’s main market also holds titles for various reasons, including being the most diverse with its stocks, which in simpler terms means the amount of different industries the LSE covers.
With a market capitalisation of a reported £3.3 trillion or US$3.17 trillion as of November 2020 and with the powerful FTSE having a market cap of £1.814 trillion as of May 2020, is one of the leading and one of the most powerful exchanges in the world.
Although the leading FTSE stock has been hit hard this year due to recent events, it has had a knock-on effect on the LSE, which has had a shrinking effect.
With hopes in light of the recent and historic vaccination news, 2021 is looking hopeful for businesses set to blossom in 2021 and beyond as the economy strives to get back on its feet.
Read Also: Stock Trading UK For Beginners 2021
The UK’s top 10 best-performing stocks in 2020
Now it's time to look deeper at the top 10 performing UK stocks.
As all company’s stood tall throughout this challenging period in time, despite the overall outcomes, we look at the ones which have performed the best this year and who are set looking to have a successful 2021.
From the top-performing insurance company to the property industry and chocolatier market, we have the top performers all here and ready for you to look into for 2021.
10 UK Stocks To Invest In 2021:
1. Rightmove Plc (LON: RMV)
The first company to grace the list on the top 10 UK stock performers is the UK’s leading property portal, Rightmove.
Although this year has brought uncertainty in all areas, it has seen the property market move considerably well.
As the restrictions this year confided individuals to their homes and gave people time to consider bigger life choices, Rightmove saw their traffic on their website soar.
But one big element that has hugely contributed to Rightmove’s results this year is the announcement from the UK government who put a ‘stamp duty holiday’ in place.
A move which is a huge weight lifted and proved to be motivational for first-time buyers as well as house owners across the country.
Stamp duty holiday allows buyers to purchase a home up to £500,000 with no stamp duty charges and for any property value above that amount, a reduced rate will be granted.
The stamp duty holiday was also subject to a potential extension which is due to end in March 2022 but recently was denied by the government.
House prices, which are up by 6.5% and house purchases being up across the UK and Northern Ireland, is enabling monies to be pumped straight back into the economy.
With a market capitalisation of £5.58 billion, this real estate marketplace is one large-cap stock that is closely monitored by both professional analysts and investors as to its performance.
Although the real estate platform has had its ups and downs this year, the property platform's current share price is at 639.60 and over the year has seen the share price move over 11% in the past 7 months.
In light of the vaccine confirmation and including Brexit, the property market is one in which that is set to grow further going into 2021and for many years to come.
Which makes Rightmove one UK stock to buy going into 2021.
2. BP Plc (LON: BP)
BP, formally known as The British Petroleum Company, is one large-cap stock that has come above its competitors in 2020 and set to have a hopeful 2021.
The oil and gas industry, like all other industries, has been hit with the difficult challenges this year.
But despite the challenges 2020 has brought, BP is looking to the future.
Announcing their way into the renewable energy sector, the company’s aim is to reach 50 gigawatts of renewable energy by 2030 whilst still being a visible presence within the oil industry.
This is a huge step for one of the best top performers within the LSE.
As the oil industry has attracted many to speculate its future, the greener choice moving into renewable energy was not only a smart move for one of the top leading oil companies in the world, but is also one move that is set to expand the company to further greatness.
As oil prices can change significantly and show uncertainty, especially this year, this is one less big worry within the renewable energy sector as the world seeks to become more eco-friendly.
Although this year has seen the lack of demand for fuel due to the world being on hold, BP had a better Q3 which showed a loss of $0.5 billion in comparison to $16.8 billion in Q2.
Bernard Looney, Chief Executive Officer at BP spoke in an online statement of major movements to come.
“Major projects are coming online, our consumer-facing businesses are really delivering and we remain firmly focused on cost and capital discipline.”
Along with adding that the company’s net debt is proceeding to fall.
As the leading energy company ‘pivots towards the future’ on their way into renewable energy, this UK stock is one to be a part of going into 2021 as the world continues to edge ever closer to becoming eco and environmental friendly.
3. Hotel Chocolat Group PLC (LON: HOTC)
As the festive season is underway, one company which is holding up well this year with their chocolate treats is Hotel Chocolat.
The ‘upmarket’ chocolatier company has its physical presence apparent across the UK with over 160 stores as well as their online presence. The company also has the additional benefit of having its own Saint Lucia plantation.
Alongside the above, the chocolatier company is making their brand even more unique by offering their takeaway services on their indulgent hot chocolates, which are vastly becoming more and more popular, with some even preferring their drinks to some of the top international coffee brands such as Costa and Starbucks.
With a market cap of £596.13 million, this sets the brand within the mid-cap category being in a safer ground than smaller- cap companies.
However, all companies still come with some risk factors which you need to always be aware of, which is why making sure you conduct further research before you invest is key.
Note: A mid-cap stock is a company in which holds a market capitalisation between $2- $10 billion. Within the LSE, FTSE 250 is a mid-cap index.
For the best mid-cap stocks to look to buy into in 2021, we have that covered for you. This article is the perfect read for 15 mid-cap stocks aiming to do well in 2021.
Whilst the start of the year saw good results turning in for the company, as sales were reported to be up by 14%, sadly took a dive when the coronavirus pandemic took over the globe and affected everything.
Following the stores closures due to coronavirus, seen the figure of 14% taken away from the company, as the retail sector as a whole was hit significantly hard across the globe.
But the company's success came from their e-commerce digital market, where sales have increased year-over-year by 150% (that’s a lot of chocolate indulgence) during the lockdown period and continuing.
As the company’s strong loyal VIP customer subscribers increased, which to date it is at 1.3 million members who receive exclusive offers from the brand helped to achieve those impressive results.
As plans have been made open to the public of a new chocolate creation coming their way, “The Invention room” which is based on the popular film and book adaption Willy Wonka, along with including the company’s creative and strategic plans set in place moving forward into 2021, the chocolate brand is set for a bright future leading into 2021.
4. JD Sports Fashion Plc (LON: JD)
The British sport fashion-retail company is one retail company that has had a good year considering the effects that Covid-19 has sprung on the retail industry this year.
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.
In recent times, JD sports were also in talks to potentially take over the long raining company, Debenhams. A company who is set for closure within the new year after falling into administration and failing to obtain a buyer, as of yet.
But JD did not succeed with the negotiations with one of the main reasons being that Arcadia Group has now entered administration, who are heavily involved within the Debenhams revenue.
As 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.
5. B&M European Value Retail SA (LON: BME)
As the nation went into several lockdown periods and with local measures still in place across the UK, B&M who is classed as an essential retailer is one company within the retail industry that is performing well in 2020.
With a market capitalisation of £4.95 billion, this large-cap stock is one that offers a balance between stability in growth and is one of the lowest companies named for their share price volatility.
The well-known British retail store that sees a variety of big-name brands sell for less and has stock products in all areas, is aiming to continue its growth leading into 2021.
With the growing queues lining the pathways outside of stores across the nation, shows just how popular the brand has become over recent years, along with its growing figures.
B&M European Value Retail has several brands under their wing including Heron Foods and a french retail store, Babou located in France. It was reported that a staggering 84% of the brand's revenue comes from the growing British brand B&M with the other companies adding the remaining.
Chief Executive Officer, Simon Aurora at B&M, issued statements in the latest B&M European Value Retail FY21 Interim Results Presentation, that within the first quarter of the financial year, despite the detriment challenges the company hired 1,800 new staff members and is aiming to archive 950 stores across the UK were they are currently sitting on 657.
As the company's long-term strategy and plans are unchanged, the brands aim to grow the businesses success leading into 2021 and beyond is still set firmly in motion.
6. Games Workshop Group Plc (LON: GAW)
As previously made the list on one of the 15 stocks to buy in 2021, Games Workshop comes in again on the list of top UK stocks to buy leading into the new year.
The Nottingham-based business, Games Workshop is proving that it's not slowing down anytime soon and has proven to be a little show stopper within the FTSE 250.
Seeing its share price surge within 2020 and with a confirmed solid growth of more than 70% this gaming brand is looking and going strong despite the pandemic.
Games Workshop has arguably been the best performing within the FTSE 250 for the past five years, which it was reported that with the return and also includes reinvested dividends of 1.600%. Which when you think, is a huge growth to deliver such a return.
The unique business which makes a lot of its profits from the “Warhammer” franchise, has proven that anything is achievable as it still aims to create further growth and great financial returns. In financial terms, Games Workshop has collectively made an income of £70 million which is a big jump from £12.3 million in 2015.
As Warhammer fanatics, not just within the UK but internationally can collectively come together on the online community, which in 2016 drew in a reported 5 million users and 70 million page views in the first two years. The figures from February 2020 show that over 500 videos have been uploaded each year, which when the new report comes through next year with this year's figures, will more than likely have increased.
More recently, the Warhammer franchise has now gone that step further and created ‘Warhammer 40,000’ an app for gaming and interaction which is bound to help boost Games Workshop’s profits further.
As analysts' predictions for the company's share price were targeted at 12,500p, the company is creeping up to where they predicted for it to be as it currently stands at 9905p.
As this UK retail-gaming company strives to achieve more growth within 2021 and further, despite recent challenges the company is holding up calming in a sea full of high waves which makes this British stock a good investment for your portfolio going into 2021.
7. NEXT Plc (LON: NXT)
In comparison to other British retailers, Next for a relative newcomer is showing what the brand is made of with their results.
Just like all retail stores, Next had to close over 500 stores and had to make various store closures permanent during the national lockdown periods, which made the company rely solely on their online sales to boost the brands revenue. Naturally, this saw Next have a decline in sales due to the big loss of footfall through the door.
However Next has managed to do surprisingly well, given that predictions were set for a 30% loss in sales this year is now looking at an expected 12% loss which in comparison to other retail stores, Next is one retailer at the top of the list.
Next could potentially see a huge growth leading into 2021 and beyond, as following the announcements that Debenhams and the Arcadia Group are both set to close unless they are bought, could potentially see Next not only having a bigger presence within the high street but it could see an increase in Next’s market shares and more.
In Q3 Next had a successful quarter with its online sales pulling in 23.1% and is currently up by 2.8% from last year on full price sales, along with a forecast net profit before tax of £365 million, which is £65 million as predicted in September.
As Next keeps pulling in the sales and continues to gain strength, the company is also pushing its year end net debit figure to be reduced also by £487 million this year. Which will leave an outstanding debit balance of £625 million.
As confirmation has come of the new vaccine along with footfall through Next retail stores, Q4 results which will be produced on the 5th of January which will show the company's performance throughout this challenging year.
But Next has a lot of potential being one of FTSE 100 top performers and is set to have a blossoming 2021 and beyond.
8. Tesco PLC (LON: TSCO)
2020 has been a year for supermarkets and essential retail shops across the globe, as the coronavirus pandemic seized non-essential shops and all other industries to close or operate on a much smaller scale.
Firstly, what a year for the Tesco brand, the supermarket company has had a strong year, to say the least with sales and has even seen its online shopping rising by 90% during the national lockdown periods.
The successful supermarket brand has been tested hugely with the pandemic but has managed to excel. With hiring temporary staff to start heading into the first national lockdown, to keeping and making over 16,000 staff permanent employees adding to the growing supermarket company.
As the reports show, Tesco’s online food sales also soared and within the company’s first-half report showed that it went up by almost double.
TSCO saw a 7% rise from the start of the year up until its first-half results ended in August with its sales hitting £26.7 billion and within the UK alone Tesco reported that food sales were up 9%.
Although the company is coping well, the brand still has had to set aside funds and have had hefty costs to pay out to adapt to the new Covid-19 safety measures in all stores across the UK.
The newly appointed CEO, Ken Murphy addressed his thoughts in a statement advising that sales of Halloween merchandise performed ‘strongly’ and are hoping that the customers are as positive around the up and coming Christmas season which will see the company's sales driven even further.
Alongside the roaring sales, TSCO has also finalised the process of selling off its Thai and Malaysian businesses which have reportedly been labelled at selling value of around £10.6 billion.
On the back of the selling the brand’s Asian presence, the company have announced that £5 billion of the net value is to be sent to shareholders via a special dividend. And a further £2.5 billion added to the Tesco PLC pension scheme.
Analysts share a positive outlook for Tescos share price for 2021 with a median price of 276p where it currently stands at 226.30p. Which makes this supermarket stock a good buy leading into 2021.
9. Aviva Plc (LON: AV)
Aviva, the UK’s #1 top insurance company comes in on the top 10 list for UK stocks to buy in 2021.
Although Aviva has had its challenges this year like most insurance companies, the insurance firm has made good ground and has made some new positive changes within this year too including appointing a new CEO, Amanda Blanc.
Along with showcasing a new strategy for the company, a big part which was also included was the sale of Aviva Singapore and Aviva Vita in Italy for £2 billion, which has the aim to ‘simplify’ Aviva's portfolio as advised by Blanc.
Following on from the positive outlook for the firm in 2020, in the latest report it states that the Board have declared a 7p per share interim dividend to be paid in January 2021 with the Board expecting to deliver a 14p per share, which is subject to the over results and a decision being made in March 2021.
Due to the insurance companies positive outlook for 2020 with its growing profits which has enabled the dividends to be at 7p per share and set to potentially increase, this is what stands out for this UK stock to be a part of in 2021.
10. Persimmon Plc (LON: PSN)
Although nothing is certain leading into 2021, the property market is one industry which has done brilliantly in 2020 considering all challenges this year has brought. And one avenue in particular at present within the industry is buy-to-let investments that are now seemingly in high demand.
With a market cap of £8.24 billion, Persimmon had an excellent start in the first half results showing almost 49% year-over-year growth from last year and is set to achieve a brilliant overall result for 2020.
Following the government announcement granting the stamp duty holiday, it has prompted many to push further to get onto the property ladder. Seeing current homeowners change their old living space to a new living space, FTB’s jumping on the property ladder and lastly to more recently has seen a surge for investors being a part of the mix with purchasing buy-to-let properties.
Although the housing purchase process came to a halt during the lockdown periods, Persimmon has reported that this hasn't dented the firm's overall results, if anything it has been pushed further.
In the second half of this year, the British homemakers reported that it has a forward order book of around £2.5 billion which is a 21% increase from last year and is currently ‘sold up’ this year.
The former Group Chief Executive, Dave Jenkinson stated in the most recently published report following on from the company's successful year, Jenkinson addressed new dividends for shareholders.
“We are pleased to announce that the Board is proposing a modest interim dividend of 40p per share. Further dividend payments this year will remain under close review.”
Dean Finch, the new CEO for Persimmon has recently shared his statements on the company's yearly performance.
In the statement, Finch advised that Persimmon are “performing robustly” despite the Covid-19 challenges and are set on course to deliver “a good result” for 2020.
Persimmon without a doubt is a strong market leader and one market leader that is set on course to not only finish this year on a high but is set for further success in 2021 and beyond.
Having shown a strong financial performance and continuing to maintain such strength in the new year along with building other avenues within the brand including customer service, Persimmon is on track to becoming arguably the best British housing company in the UK.
How to invest in UK stocks?
Now we have established some of the UK’s top 10 performing stocks in 2020 and stocks to be a part of going into 2021, now it's time to see how to become a part of the UK stock trading action.
Before you start your journey into investing it's vital that you know that nothing is guaranteed when investing your money. Which is why it is wise to conduct and carry out as much research as you can into all areas where you are thinking of placing your money.
You can start your trading journey from the comfort of your home with all the help and guidance at your fingertips.
Firstly, to trade in UK stocks you will need to set up a trading account and find a broker that is suited to you.
There are many online trading platforms available for you to explore online, however, it is best to choose wisely and make sure the platform you do choose has the required licenses along with brokerage licenses.
eToro, the world's leading social and trading platform offers it all at your leisure. The online trading platform makes your start into stock trading simple, stress-free, effective and fast.
Opening your eToro account can be done within minutes, along with opening a brokerage account, which is advised to keep your money separate from your everyday accounts.
After you have opened your account and picked a broker well suited for your needs, then the last point is to deposit monies to start your stock trading journey.
There is no time limit, you can take as much time and conduct as much research as you need before investing your money into anything, as it is always wise to know what you are going into.
Including in all the benefits that eToro has to offer including 0% commission, access to all the leading top stocks and more, eToro also offers trading education for you to understand and start your journey into stock trading.
With no startup costs, you can simply sign up for free to experience first hand to see how a trading account looks and operates, so when it comes to the real deal you will feel more confident in how to trade.
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There are many opportunities to invest in the UK stock market in 2021, but what has become clear this year is that it is worth looking to the best 10 UK stocks. Below are top key points for UK stocks in 2021.
If you remember anything from the best UK stocks for 2021 to investmake it these key points.
- Rightmove and BP top our list of best stocks in the UK for 2021
- Before investing, always conduct additional research into your chosen stocks.
- Investing and buying into stocks comes with no guarantees with risk factors involved.
- Invest within your financial means.
- And lastly, it's wise to make sure you are 100% comfortable with your chosen investment especially if you are looking to invest for the long haul.
We hope our list of the top 10 UK stocks to invest in 2021 has been helpful.
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.