2024’s slowly drawing to a close, and it’s been a fantastic year for UK shares. Including dividends, the FTSE 100’s generated a 12.7% return for index investors. That’s almost double its annual average over the last decade.
But for stock pickers, the gains might have been far more impressive, especially in the last six months. In fact, looking at the top 10 performers within the UK’s flagship index, an investment portfolio could have grown by more than 80%!
Top 10 UK stocks of H2 2024
Here are the biggest FTSE 100 winners over the last six months:
Company
Industry
Share Price Return
Total Return
International Consolidated Airlines (LSE:IAG)
Travel & Leisure
+80.3%
+83.3%
DS Smith
General Industrials
+58.8%
+65.0%
Pearson
Media
+34.3%
+35.3%
Imperial Brands
Tobacco
+30.6%
+34.7%
Natwest Group
Banks
+31.9%
+34.4%
Marks & Spencer Group
Retailers
+33.6%
+33.9%
Barclays
Banks
+31.7%
+33.5%
Standard Chartered
Banks
+29.6%
+31.3%
easyJet
Travel & Leisure
+29.5%
+29.5%
Beazley
Non-life Insurance
+24.9%
+24.9%
Looking at the list, it’s clear that strong performances have been shared across multiple industries. And that also lines up nicely for investors who are looking to build a fairly diversified 10-stock portfolio today. So does that make this collection of outperforming companies terrific investments for 2025 and beyond?
Maybe. In my experience, winners tend to keep on winning. But it’s also important to consider that these stocks can also reach unsustainable valuations that can result in losing investments. After all, even the best company in the world can still be disastrous for a portfolio if the wrong price is paid.
With that in mind, let’s zoom in on International Consolidated Airlines (IAG) to see what’s behind its recent explosive returns.
Capitalising on tailwinds
British Airways owner IAG has seen its market-cap take off as the airliner firmly beat expectations during a period where most of its peers underperformed.
Travel demand in 2024 reached an all-time high, meaning it‘s now fully recovered from the pandemic-triggered downturn and has continued to grow since. Paired with an expansion of flight capacity, this translated into 5% passenger volume growth and 7% passenger revenue rise during the third quarter.
However, it was the surge of profit margins that really stole the show, with operating income jumping by 29% to £1.4bn over the first nine months of the year. At 21.6%, IAG’s operating margins are now significantly ahead of its European rivals Air France-KLM (13.1%) and Lufthansa (12.5%).
Therefore, it isn’t surprising to see the stock take off. But there have also been a few headwinds as well. Pilot strike action was taken in its Aer Lingus division, staff salary expenses have increased across the board by double digits, and supply chain constraints are disrupting the entire sector.
Having all these challenges hit IAG all at once is far from ideal. And with the impact of higher expenses not completely reflected in the latest financials, momentum could slow as we move into 2025.
Overall, I think IAG’s navigating these challenges admirably, and the firm’s worth closer inspection. However, it’s also clear that not everything’s smooth flying.
The story’s very much the same for all the other top-performing UK shares these past six months. Only by carefully examining each one can investors make an informed decision and avoid falling into growth traps.
The post Are these the best 10 UK shares to consider buying and holding in 2025? appeared first on The Motley Fool UK.
We think earning passive income has never been easier
Do you like the idea of dividend income?
The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?
If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…
Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.
What’s more, today we’re giving away one of these stock picks, absolutely free!
Get your free passive income stock pick
More reading
An investor buying £10,000 of IAG shares at the start of 2024 would now have this much!
My Stocks & Shares ISA’s up more than 50% in 2024! Here’s my plan for 2025
Here’s how to cut a coffee a day and invest in 2 stocks a month to aim for a £65k second income
This major bank says the IAG share price is too cheap at 6.7x earnings
The IAG share price soars another 31% in a month but its P/E is still just 6.74!
Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays Plc, DS Smith, Imperial Brands Plc, Pearson Plc, and Standard Chartered Plc. 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.
