2 top FTSE 100 stocks surging to record highs (hint — not Rolls-Royce)!

Ben McPoland takes a closer look at a pair of high-performing FTSE 100 stocks that continue to enrich long-term shareholders.

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It’s a bit of a myth that FTSE 100 stocks don’t go anywhere. Granted, the overall index tends to move upwards at a snail’s pace, but some shares can produce very attractive returns if picked wisely.

Here are two high-quality Footsie stocks that have just notched all-time highs. Neither is rocketing Rolls-Royce ( which is also at a record level).

InterContinental Hotels Group

First up is InterContinental Hotels Group (LSE: IHG). The stock just topped 10,000p (£100) for the first time, having risen by a whopping 58% in the past 12 months.

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Over five years, IHG stock has more than doubled! It also pays a modest-but-growing dividend.

Created with Highcharts 11.4.3InterContinental Hotels Group Plc PriceZoom1M3M6MYTD1Y5Y10YALL4 Dec 20194 Dec 2024Zoom ▾Jan '20Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '242020202020212021202220222023202320242024www.fool.co.uk

The company has a diverse portfolio of hotel brands, including InterContinental, Crowne Plaza, and Holiday Inn. These are benefitting from a rebound in travel following the pandemic.

In Q3, global revenue per available room edged up 1.5%, despite weakness in China. The firm now has a global pipeline of 327,000 rooms (2,218 hotels) under development or planned.

Clearly, IHG isn’t taking its foot off the pedal.

I have to confess, I’m disappointed with myself because I’ve had my eye on this stock for many months now. Operating an asset-light business, IHG franchises most of its locations, collecting royalty fees on hotel revenues. This ensures steady, profitable income with reduced operational risks.

Unsurprisingly after its tremendous run, the stock’s valuation is quite high, with a forward price-to-earnings (P/E) ratio of 25. This doesn’t leave much margin of safety if something bad (another pandemic, war, etc) disrupts international travel.

However, I think it could make for an excellent addition to my portfolio, complementing Airbnb, Visa and Rolls-Royce, which are all benefitting in one way or another from a boom in global travel and tourism.

I plan to finally invest in 2025 if the share price dips back under £90.

RELX

The second FTSE 100 stock hitting new heights is RELX (LSE: REL). Shares of the data solutions provider have jumped 23% in the last year, also boosting the five-year returns above 100%. Nice.

Created with Highcharts 11.4.3RELX PriceZoom1M3M6MYTD1Y5Y10YALL4 Dec 20194 Dec 2024Zoom ▾Jan '20Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '242020202020212021202220222023202320242024www.fool.co.uk

Back in September, I wrote that I’d invest in RELX immediately if the market crashed. It hasn’t, and since then the stock has gone up another 5%.

The valuation still seems a tad too high to me,though. We’re looking at a forward P/E ratio approaching 30 — a significant premium to the wider FTSE 100.

Then again, the wider index isn’t packed with tech stocks benefitting from the artificial intelligence (AI) revolution, like RELX.

It owns vast, hard-to-replicate datasets across science, medical research, and law (through LexisNexis). And it’s using AI to transform these into powerful tools for its customers.

For example, its new platform leveraging generative AI, Lexis+ AI, is growing nicely. It can analyse uploaded documents to identify potential legal issues, answer queries, and rapidly draft documents.

More than half of RELX’s revenue is now subscription-based and recurring, helping insulate it somewhat from cyclical ups and downs. In the first nine months of 2024, underlying revenue grew 7%.

One potential risk I see is that rapid AI advancements could enable competitors to extract valuable insights from open data sources, potentially eroding RELX’s competitive moat.

As things stand though, the business is humming along nicely. The stock remains on my watchlist heading into 2025.

Should you invest £1,000 in Phoenix Group Holdings Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Phoenix Group Holdings Plc made the list?

See the 6 stocks

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Ben McPoland has positions in Airbnb, Rolls-Royce Plc, and Visa. The Motley Fool UK has recommended Airbnb, InterContinental Hotels Group Plc, RELX, Rolls-Royce Plc, and Visa. 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.

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