UK investors have done pretty well in 2021. With the FTSE 100 index hovering around 7,085 points, it has gained around 625 points this calendar year. That’s an uplift of nearly a tenth (9.7%) in six months. Also, over the past 12 months, while some individual FTSE 100 shares have done brilliantly, others are in the doghouse.
FTSE 100 winners and losers
In the year since 29 June 2020, the FTSE 100 has gained almost 860 points. That’s an uplift of more than an eighth (13.8%) over 12 months. Of 101 stocks in the Footsie (one is dual-listed), 87 have risen in value over a year. Gains among these winners range from 269.4% to 0.6%. The average increase across all 87 gainers is 37.7% (almost two-fifths). This leaves us with the FTSE 100’s 14 losers. Losses among these losers range from 0.2% to 20.8%. The average loss across these 14 decliners is 6.7%. That’s around 20 percentage points lower than the index return. Ouch.
The Footsie’s five biggest dogs
These are the FTSE 100’s five worst-performing shares over the past 12 months:
|
British American Tobacco (Tobacco) |
-9.5% |
| Reckitt Benckiser Group (Consumer goods) | -10.6% |
| DCC (Support services) | -12.1% |
| GlaxoSmithKline (Healthcare) | -14.1% |
| Just Eat Takeaway.com (Online delivery) | -20.8% |
Losses among these FTSE 100 dogs range from almost a tenth (-9.5%) at cigarette maker BAT to over a fifth (-20.8%) at food delivery firm JET. I wonder how many of these stocks you own, either individually or inside FTSE 100-focused funds? If you’re feeling down about owning any of these losers, take some comfort from this thought. My largest individual shareholding (and my family’s) is in GlaxoSmithKline — 100/101 in this Footsie ranking. What’s more, I’ve been a GSK shareholder for decades, with some pretty mixed outcomes at times.
I’d buy three of these five dogs today
As an income-seeking value investor, I hunt for bombed-out, unloved, and undervalued FTSE 100 stocks to add to my family portfolio. Currently, GSK shares offer a dividend yield of nearly 5.7% a year (around two percentage points higher than the Footsie’s yield). However, the 80p dividend will be cut to 55p in 2022 and could go lower or higher in 2023. Even so, I will hang onto my GSK shares, using their tasty quarterly dividends to boost my portfolio returns.
I’m also a fan of £45.8bn FMCG (fast-moving consumer goods) giant Reckitt Benckiser. I’ve been watching Reckitt grow rapidly this millennium, rising from a share price of £5 in 2000 to today’s heights around £65. This FTSE 100 firm had a great 2020, as sales of cleansing and hygiene products soared during Covid-19. The shares offer a dividend yield of 2.7%, which could rise over time. I don’t own shares in RB, but I see it as a good business with decent growth potential, so I’d buy at current price levels.
Third, tobacco stocks generate some of the FTSE 100’s highest cash dividends to shareholders. At the current share price around 2,820p, BAT offers a mouth-watering dividend yield of 7.6% a year. I don’t own BAT at present, but I’d happily buy and hold this FTSE 100 stock to watch my fat dividends roll in. Finally, one word of warning: as a veteran income investor, I know only too well that company dividends are not guaranteed. They can be cut, suspended, or cancelled at any point, which happened big-time in 2020. Therefore, never rely solely on dividends for all of your income!
