The FTSE 100 has a reputation for being home to some of the biggest dividend stocks in the world. That’s hardly surprising, given its constituents are largely mature industry leaders. However, despite their size, there are still plenty of businesses with impressive growth potential. And even in the last 12 months, some have even delivered triple-digit returns to investors.
So let’s take a look at the top 10 performing stocks from the UK ‘s flagship index.
Chunky returns
Over the first 11 months of 2023, the index closed at around 7,529 points. That’s actually down slightly from where it started in January at 7,554. But despite what this 0.3% decline would suggest, many businesses have delivered far more impressive gains.
With the FTSE 100 weighted by market capitalisation, only the largest companies in the index tend to affect its direction. As such, it’s easy to miss the fact that some of its smaller constituents have been on fire in 2023, with Rolls-Royce taking the crown as the best performer.
| Company | Industry | One-Year Capital Gain (%) |
| Rolls-Royce Holdings | Aerospace & Defence | +216% |
| Marks & Spencer Group | Consumer Discretionary | +113% |
| 3i Group | Financial Services | +76% |
| Centrica | Utilities | +62% |
| Sage Group | Technology | +50% |
| B&M European Value Retail | Consumer Discretionary | +50% |
| Melrose Industries | Aerospace & Defence | +48% |
| Associated British Foods | Food Producers | +46% |
| Dechra Pharmaceuticals | Pharmaceuticals & Biotechnology | +43% |
| InterContinental Hotels Group | Travel & Leisure | +43% |
A quick glance at this list reveals that growth opportunities are seemingly present across a wide range of industries. This suggests there’s plenty of room for growth investors to diversify without having to worry about performance dilution. After all, if someone had invested equally across all these 10 businesses at the start of the year, their portfolio would be up a staggering 74.7%!
To put this in perspective, if such returns were maintained for just 10 years, investing £500 a month would translate into a portfolio worth £11.3m!
Let’s be realistic
As glorious as it would be to become a multi-millionaire in a decade, maintaining these levels of gains for such a long period is extraordinarily difficult. Even if we ignore the threat of a potential crash or correction, even the world’s greatest stock picker, Warren Buffett, has only managed an average of 20% over his career.
Furthermore, investing in these 10 stocks today is unlikely to yield similar results in 2024 and beyond. Most of these gains stem from investors underestimating the potential of these enterprises. And when paired with the recent stock market correction, surprise earnings can send valuations flying over short time periods.
But the upward momentum also means investors have taken notice, and with higher expectations now baked into the stock price, achieving similar levels of share price growth in 2024 would likely require even more explosive performance that’s unlikely to materialise.
Having said that, there’s still a chance to unlock long-term gains with these businesses. In my experience, winners tend to keep winning if the returns are being driven by strong business performance. Therefore, investors looking for some long-term growth opportunities may be well rewarded to investigate these companies further.
