These top 10 UK stocks to consider in 2021 promise an interesting year
Best British Stocks for 2021
Planning to invest in the UK stock in 2021? Want to stay ahead of the stock trends? What British stocks should you invest in 2021? Which Uk shares will be the best return on investment in 2021? Let’s take a look!
We all know that 2020 has been a pretty hectic year for the UK stock market and many of us are anxious about what 2021 might hold.
We’ve made it easy with our complete guide to the top 10 UK shares to consider in 2021.
There are many British companies that are showing fantastic results despite the Covid-19 pandemic that is taking over the nation.
The UK stock market has taken a hit over the year, to say the least. But despite the negativity, some companies have performed fantastically in this uncertain period and who are set to shine further as we head into the future.
The FTSE 100 has had a tough year in 2020 but as of late, the index is above already in 2021.
Following on, some of the index's participants are companies that are not to be missed this year and worth looking to potentially keep hold of for the long- haul.
Depending on what you look for in UK shares, whether it be dividend shares or shares to hold for the long-haul. There is a good mix of brands that you should look to add to your portfolio for many reasons.
If dividend stocks are your go-to, be sure to read Top 5 Dividend Stocks to buy in 2021 to add to your collection.
Let’s take a look at some of the top UK shares that are leading the way at the start of 2021 that you should consider to buy, or at least to keep an eye on these top UK shares.
The Top 10 British Shares For You to Consider in 2021:
Before we take a closer look at the best UK shares in 2021, here are our top 10 picks:
1. NEXT
5. Scottish Mortgage Investment Trust
8. Aviva
10. BooHoo Group
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These stocks have made the list either due to their performances over the past year and who look to have a strong outlook for future potential.
And then there are some of the chosen UK stocks that may not have performed brilliantly in 2020, however, are showing good results as we move further into the start of the first month of the new year.
Top 10 British Stocks to Consider in 2021!
Here is our list of 10 of the top UK shares spread across various industries:
1. NEXT PLC (NXT)
Many U.K. retailers and international retailers have mostly been hard hit over the past year.
But was superstar-brand Next Plc has led the way and proved that retailers can still keep their head above water even in hard times.
NXT has sparkled considering the challenges the world has faced this year and even sees its share price up above 20%.
There is no wonder analysts and investors are looking at this large-cap stock intently.
As it stands NXT share price is 80.18, which considering the company’s potential we believe this is a fair price.
Along with having a current 52-week range of between 3.390 at its lowest and 8,018 at its highest.
This stock is a fantastic growth stock as it progresses in the future. As analysts have predicted the U.K. retailer to reach 8.8% revenue growth per year and the company’s earnings growth to hit 23.2% per year.
As of January 2020, before the Coronavirus pandemic came into full effect, the company confirmed that total sales were up 3.3% YoY.
The company’s profit before tax rose by 0.8% to £749 million YoY and the company’s earnings per share (EPS) were also up by 5.6% to 472.4.
Naturally, as the pandemic took over saw NXT’s figures go down. But pushing through the year the company started to gain momentum.
A trading statement released on the 5th January 2021 showed the company’s successful fourth quarter over the Christmas period.
The company reported a -1.1% total price sales YoY which was better than expected by the general guidance in October of -8%.
But moving forward Next have given their predictions for which include yearly net debt to be reduced by £487 million to £625 million and profit before tax forecast at £370 million. This is after adding the November and December figures.
Looking to the full year ahead, the 2021/22 profit before tax forecast is £670 million.
From the company’s performing year considering the destruction that has occurred, the company’s share price and the growth potential, make this top UK share one to buy for a great long-term investment.
Next is due to release its next financial statement on April 1st 2021.
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2. JD Sports Fashion PLC (JD)
Okay, a company that has to make the cut of being a top UK share has to be JD Sports Fashion PLC.
JD has witnessed an impressive year as many retailers have struggled and some even closing their doors for good.
The company managed to gain strong revenue through its online sales during the pandemic and is still set to continue.
Although, the company’s half-year results witnessed a decline in revenue as it was reported that it was 6.5% down to £2.5 billion as of August 2020.
The revenue was confirmed to have been split from its sports fashion sales which were reduced to 4.6% to £2.4bn and the brands outdoor range taking a whopping decrease of 30.2% to £142.5m.
Although the company reported more losses across various sectors, the company’s profit before tax and exceptional items increased to a staggering £73.4 million, which showed a positive outlook for the brand.
Along with JD’s strong financial results in 2020 the company is also on the hunt for more.
It was confirmed in December 2020 that JD had bought Shoe Palace for $325 million, increasing the company’s shares by 5%.
Along with ending talks to buy the British retail chain Debenhams, who is set to close its doors in the coming months.
The company has a current share price today of 829.80 and has a 52-week range of 293.20 its lowest and 883.20 its highest and with a P/E ratio of 42.55.
Even though the market is still showing trouble ahead, it indicates that there could be more bumps in the road and potential volatility for all businesses.
But for JD, we believe that although it could be slightly impacted we can not see it having a huge impact as the company continues to grow.
Based on the company’s strong performance, its attractive share price, its strong national and international presence and the company’s growth and momentum moving forward, we believe this company is one to have and to hold.
JD Sports Fashion PLC is scheduled to release its next financial results on 13th April 2021.
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3. Barratt Developments Plc (BDEV)
At the beginning of the year and into the second half of the year the property industry also had a hard run.
But moving into the mid-late end of the year, the industry operated well including the UK’s largest home developers Barratt Developments plc.
With the government confirming the news of the popular Stamp Duty Holiday scheme along with developers being able to operate, following the safety measures that were put in place after mid-2020 as the second lockdown hit, the company has managed to perform well.
In a recent statement, BDEV confirmed good figures, as a result of the government stamp duty holiday scheme. The company has agreed sales of 13,588 homes in the past six months up to December 31st, up by 14.3% from 2019.
The company’s house completions were also up over the past six months as Barratt Developments confirmed they completed 9,077 homes which is up from 8,314 in 2019.
The company’s shares also witnessed an increase up by 4.5%.
For investors who keep up to speed with their knowledge, this news was to be potentially expected to be positive from the home developers and from the property industry overall.
The company’s share price stands at 695.60 with a 52-week range of 364.70 at its lowest and 878.40 at its highest with a P/E ratio of 17.88.
Even though there is uncertainty surrounding the property industry within the coming months, as the Stamp Duty Holiday scheme is due to end and the Help to Buy scheme also making changes. It is naturally making investors and analysts think deeper and look closer into this industry.
We believe that the momentum will still carry forward even in light of the changes. With growth potential still edging ever forward as the leading home developers have a strong forward order book and a well-capitalised balance sheet.
Making this company one of the top UK shares in 2021.
Barratt Developments Plc is due to release its next financial statement on 4th February 2021.
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4. Vodafone Group Plc (VOD)
Vodafone, one of the largest wireless carriers in the world has had its challenges to say the least over 2020.
However looking at the future for the British large-cap stock and the fact the company became profitable this year, is why it makes the list of being a top British share for 2021.
VOD has recently witnessed analysts from various research firms including Zacks Investment Research, changing the company’s consensus rating from a ‘Hold’ to a ‘Buy’.
The reasoning for the change could be for various reasons. But one clear big reason has to be the move into the popular 5G network.
Along with the 5G outlook, Vodafone has also transformed almost a 50% stake in Cornerstone in its infrastructure unit, Vantage Towers.
This merger with Cornerstone leaves a strong outlook for VOD as it looks to have a deeper secure income stream and enables the company to move down its debt as promised.
Vodafone back in September was named as the fastest and best overall performer with its 5G network in London, beating big leaders EE.
Although the telecommunication company has seen its share price fluctuate over the year, the share price for the stock today is at 127.22 with a 52-week range of 98.02 at its lowest and 156.66 at its highest.
VOD also has an attractive dividend yield of 6.47%, which is another reason to consider this connecting stock.
Moving forward we believe Vodafone is a top UK share that you may want to look at buying in for 2021.
With its attractive share price and its projection for good growth over the year, this is just two elements to name.
Vodafone is set to release its next financial results on February 3rd in a Trading update followed by the company’s FY results on May 18th 2021.
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5. Scottish Mortgage Investment Trust plc (SMT)
Scottish Mortgage Investment Trust the Edinburgh- based investment management company is a top UK share for 2021.
Starting with the company’s shares that are 107% up over the year and potentially are set to continue moving forward.
As it stands the company’s share price is 1,234,00 with a 52-week range between 468.40 at its lowest and 1,278,00 at its highest.
Being a young business, this investment company has shown the potential of what you can achieve when you buy wisely and smartly.
The firm seeks to pride itself on being unique and patient when picking chosen stocks spread across all industries and from all over the world from international markets.
Having and making a diverse portfolio built up with not only top-performing stocks but stocks that are not even on the open market.
The investment firm has a solid record. Although it’s not advised to run off a company’s past history we can’t see this UK share being one to disappear or dramatically change anytime soon.
The investment company currently has a P/E ratio of 2.56 which is deemed to be a good value for the stock’s potential.
With a market cap of £17.88 billion and the company’s share price showing a solid rise over time, it indicates which way this share's future is heading.
If it’s past performance is anything to go by then this UK share is one to look to invest in for 2021.
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6. WM Morrison Supermarkets PLC (MRW)
Over the past year, we have witnessed store closures across the nation on several occasions, as we sit currently in a third lockdown period.
But for essential shops like the supermarket brand Morrison’s Plc, these have been able to operate and operate well considering the challenges.
Being the UK’s 4th largest supermarket, it is also a brand that has driven well over the year and proves to be one of the more attractive brands out of the list of supermarket brands on the market today.
In the company’s latest financial trading update, the supermarket brand MRW confirmed that it had made a good result over the festive period. Confirming the company’s retail performance improved by 8.0%.
MRW has done exceptionally well with its online grocery store as it has been deemed to be profitable.
And being in the UK’s third national lockdown with uncertainty still around, this avenue is still set to grow.
The company expressed in their outlook for the future that its 2020/21 profit before tax and exceptionally to be in the range of £420m - £440 million, as it was predicted.
The company also confirmed they have been forward-planning as they stocked up on stock worth £65 million ahead of Brexit.
Morrison’s have also agreed to increase staff's minimum wage to £10 per hour as from April, being the Uk's first supermarket to pass the £10 threshold mark.
So why is this supermarket brand ahead of others?
MRW is looking like a better investment in terms of its share price and its online grocery service going from strength to strength, driven from the company’s loyal consumer demand.
The company has also collaborated with Amazon offering their services through Amazon prime subscription.
Their aim of making life simpler, easier and affordable for families in these difficult times, enables them to be able to order an array of Morrison’s made up food boxes. Each box has been designed uniquely for group enjoyment.
Offering a varied selection including vegan, vegetarian and child friendly options.
This avenue is a big and unique step forward for the supermarket brand.
Analysts have also given their verdict on the brand, with analysts who are watching the stock closely giving the brand a consensus ‘Hold’ rating, 2 analysts giving the stock a ‘Buy’ rating and 1 ‘Sell’.
As it stands MRW share price is at 182.55 with a 52-week range between 161.75 at its lowest to 193.30 being the highest.
The company has a P/E ratio of 16.75.
The company’s share price has moved 5.37% in total over the past year.
For the company’s stability, its attractive share price, its growth in all avenues including with the collaboration with Amazon and along with the company’s demand.
We believe this UK share is a share that if you haven’t yet considered, to consider as we move forward into 2021.
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7. GlaxoSmithKline PLC (GSK)
The British multinational pharmaceutical company is a share to have on your radar if not, to be added to your collection of UK shares.
The pharmaceutical industry is an industry in which many believe will carry on making good gains, even more so in light of the news over the past year.
GSK specialise in areas such as consumer health, medicines and vaccines which are always in demand regardless of the world effects, making this UK stock already having a good long-term potential outlook.
Given the Covid-19 pandemic, as vaccines are being enrolled out across the globe, this can surely only benefit this company for the future.
As who’s to say that we will not need to have further vaccines relating to this deadly disease in the years ahead.
The company’s pharmaceutical division is the company’s largest division. As you will see it dominates the company’s income stream.
In the company’s quarter 3 results it was reported that the pharmaceutical division was at £4.2 billion - 3% down, consumer products 2% up to £2.4 billion and its vaccines at £2.0 billion down by -9%.
Reported Group sales total came in at £8.6 billion -3% down.
Although the company has declined in terms of the company’s earnings per share (EPS) as it was down to 0.25p and its adjusted EPS to 35.6p, the company is set to gain more speed moving forward.
In total, GSK’a earnings have grown by 39.7% over the past year.
The company’s share price today is 1,413,60 with a 52-week range of between 1,291,80 being its lowest and 1,838,00 being its highest.
The company’s P/E ratio is 11.19.
What do analysts predict for the future for GSK stock?
Well, it’s been forecast that the company's earnings are going to increase by 10.22%, along with an average twelve-month price target for GSK of 1,751,13.
Additionally, it has been given 1,300 as lowest and 2,240 as highest price target.
A consensus ‘Hold’ rating has been given by 10 analysts and 7 giving the stock a ‘Buy’ rating.
The company also pays a dividend which has been attractive to investors for a good period of time. To which is also a good strong and reliable dividend, a great addition to receiving regular income.
The company’s dividend yield is 5.66%.
GSK is looking promising at the moment.
The company’s share price is looking cheap for its potential and provides good value. One thing all investors look for is a stock to create and achieve success in all forms, to which this UK share has that potential.
Considering all factors including the company’s P/E ratio, this UK share is a good company to get hold of now. The returns the company can potentially bring in the long-term is a strong advantage for this stock.
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8. Aviva PLC (AV)
Aviva, the UK insurance firm is a share that is a good buy for 2021 in our opinion.
Many may not have been impressed by this stock in 2020, but there is no denying that AV stock has shown some good results.
For its momentum moving forward and towards the end of 2020 is why this comes as a stock to buy in 2021.
In the company’s announcement on November 26th, Aviva reported it did report declines within the nine months from the issue of this report, with some positive results adding to the mix.
Considering the impact Covid-19 has had on business across the board, AV reported that its dividend was a solid positive factor for the stock along with general insurance net written premiums up to £7.1 billion in comparison to 2019 at £7.0 million.
As mentioned, one standout positive for the insurance company is its dividend.
The company currently has a dividend yield of 7.0% and is also one of the FTSE 100 index highest paying dividends.
The company has gained in terms of its share price recently also which is up 27% which will be added to the company’s dividend.
From the company's outlook, AV has expressed that they are in a shake up period to make a more effective business, aiming at markets where the stock can excel well.
The company has also confirmed that they are looking into its current portfolio in order to look at offloading some assets that are not operating the way they should under the current strategies.
The forecast predictions by 13 Wall Street analysts have given this stock a consensus ‘Buy’ rating by 8 analysts with 5 analysts rating the UK stock a ‘Hold’.
The company’s twelve-month average price target is 374 with AV’s high price target is at 477 and a low price target of 325.
Aviva’s share price today is at 348.50 with a 52-week average range between 211.00 at its lowest and 412.80 at its highest.
Aviva’s new strategic plans are looking set to grow well as we head into the coming years. This stock may not be one for the short-term, given they are still making changes from within. But most certainly you will benefit more so by having it within your collection for the long-term.
Although nothing is certain for AV stock as we move forward as the economy recovers. With this company's exciting plans and standout factors, makes this a top UK share for 2021.
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9. B&M European Value Retail SA (BME)
One UK company that has a lot of demand over the year is B&M European Value Retail.
The company has witnessed its share price rise by over 10% over the past couple of months, along with witnessing hundreds of consumers around the nation line outside their regular stores to explore.
The company looks as though they are set comfortably and who are happy to keep generating and renewing their current position, rather than looking to establish huge growth.
So if you're thinking about this stock for the short-term, it may be wise to reconsider as this stock is looking more suitable in the long run.
As it stands B&M is looking like good value considering its share price and reflective figures.
As it is, the company’s current share price is 504.20 with a 52-week range of 266.50 at its lowest and 550.20 at its highest. With a P/E ratio of 17.73.
In a released updated Q3 statement by the brand, BME evidenced just how strong the Christmas period was for the retail company.
The group revenue within the 13- week period up to 26th December, increased by 22.5% with all UK stores generating an increased revenue growth of 26.6%.
Sales were also up for the brand as they surged to 21.1%.
The popular retailers have also had their sights focused ahead as they opened 18 new stores during the fourth quarter, which brings a total of 45 gross with 10 store closures for the full year.
In the light of the company’s success this year, the company’s CEO Simon Arora, also made a staggering earning off the back of the company’s financial success.
Arora, who is a big shareholder in the brand witnessed a £30 million dividend payout.
Alongside, it has been confirmed that the brand looks to award 30,000 of its members of staff an extra week's wage due to their ‘considerable efforts’ over the challenging year.
In the trading update, B&M shared their outlook on the brand's future.
“With our combination of exceptional value and convenient out of town locations, we are confident that our business model will prove highly relevant to the needs of customers in 2021.”
This retail brand is a nation's favourite, along with its hand in various other avenues and international presences. B&M is a solid British share that should be considered to be added to your portfolio, especially as this stock's earnings grew almost 50% over the past year.
B&M European Value Retail is set to release its FY21 preliminary results on 26th May 2021.
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10. BooHoo Group PLC (BOO)
The fashion retailer BooHoo has had an impressive year, to say the least and still looks strong to continue.
Whilst stores across the world have closed their doors on several occasions, BooHoo relished as it saw its sales surge through its online presence.
And the brand is still continuing to develop. As from April 2021 the fashion company is set to open a new warehouse as they continue to invest inside the business.
But it hasn’t all been plain sailing for the brand though, following on from the backlash of unethical trading back in April 2020.
This saw shares dip and the future a little hasty for the brand.
However, the company issued an apology and stated that they were looking into these allegations.
After independent investigations took place, it was confirmed that all boohoo trading operations are above board and witnessed no wrongful doings.
This naturally regained confidence and interest from further investors to look at this stock.
The company’s share price has once again taken a rise, as the company reported an increase in its revenue over the festive period by 40%.
The textile company’s share price has been hugely volatile over 2020 and it was not just because of the Covid-19 pandemic.
Various reasonings including unethical issues from within the brand was one big factor, along with the market taking a dive at the start of the pandemic until it started to regain some momentum towards the summer.
The fashion retailers announced in their recent trading update report that the company had a strong and positive November and December, due to the Christmas holiday season pulling in the sales.
Across the board in both the US and the UK, the demand was strong.
Whilst the US reported a strong 52% in revenue, the U.K. was not far behind as it reported a 40% increase in revenue. Which led the fashion brand to increase its full-year revenue guidance up to 36-38%.
Gross margins for the company slightly decreased to 53% in the quarter.
Back to the fashion retailers share price, it seems to be on the rise following the unethical news.
The company’s share price is at 338.20 today. With a 52-week range between 157.50 at its lowest and 415.00 being its highest.
The company is currently sporting a P/E ratio of 49.23.
What do analysts predict for the fashion brand?
BooHoo has been given a consensus ‘Buy’ rating by 8 analysts, with 5 analysts giving the British share a ‘Hold’ rating.
The company’s earnings are forecast to grow by 27.99% per year and with the company’s profit predicted to grow by 83% across the coming years.
As the fashion retailer appeals to a range of various age-ranges with its fashionable and affordable on-trend designs, the convenience of being able to order their products online is becoming a little too easy.
Another key point to mention is that BooHoo is host to other leading fashion brands including PrettyLittleThing, MissPap and NastyGal, who individually have their own consumer following.
This UK fashion brand is continuing to be on the rise as we head into the new year.
From what we see and believe, this is going to be the case for potential years to come, as BooHoo looks set to continuing to deliver fresh fashion trends at affordable prices all across the globe.
How to pick the best UK stocks in 2021 - Summary
To summarize, these Top UK shares to buy in 2021 all come with their many advantages as they look to continue achieving success for the coming years.
Whether it be dividend shares that you are looking for or long-term returns, these top 10 UK shares offer you some of the best earnings on the market today.
However, it’s wise to always conduct additional research before looking to invest in your chosen shares, as each company comes with its own risk elements.
Ready to dive into the UK Stock market?
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How To Invest In The Top UK Shares?
If you are looking to invest in the top-performing UK stocks, we have a breakdown of just how quick, simple and easy it can be to become a part of such an exciting journey.
Firstly, you need to make sure that this avenue is something you understand, which is why it is advised to conduct as much research as you can along with learning on the way of what is entailed in stock trading.
Secondly, the next step is to look at obtaining a broker to start your journey.
There are many brokers available on hand for you to start trading. However, it is strongly advised to do your research in this part too.
Choosing a licensed broker who is regulated to operate within the trading market is key. Along with a trusted online trading platform for your needs on the go.
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Key Takeaways
If you remember anything from What Top 10 UK Stocks to Consider in 2021?, make it these key points.
- Top British shares chosen for 2021 have a strong performing background across various sectors.
- Top UK shares are companies who have produced good solid results and grown well over time to lead to where they are today.
- Considering these Top Performing UK Shares are great additions to your portfolio. Adding diversity, growth and value.
- Along with the positives that these blossoming shares hold, they do have their own risk factor elements.
- Carrying out additional research before investing in your chosen stocks is strongly advised.
- Along with the future moving forward, we expect that more UK companies will soon shoot back into the limelight as we move forward in 2021.
- Choosing a broker for your trading journey is a vital factor when looking to enter the stock trading market.
- Lastly, always invest smartly and wisely.
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.