Hargreaves Lansdown has issued a list of the year’s top-performing FTSE 100 stocks, and there are some real surprises in there.
Who thought NatWest Group would be the best performing UK blue-chip of 2024? The bank’s shares sprang into life around March and have been flying ever since. The NatWest share price is up 88% year-to-date but the total return is 101%, including reinvested dividends.
Second placed Rolls-Royce Holdings is also impressive. After a blockbuster 2023, when its shares rocketed 227%, I felt it had to run out of jet fuel. But it climbed another 90%, and with the dividend restored (albeit at a modest level) investors got a total return of 94%.
These blue-chips have smashed the market
There’s a real under-the-radar stock in third place: DS Smith (LSE: SMDS). Its shares are up 78%, with a total return of 84% once dividends are thrown in.
I last looked at the sustainable paper and packaging specialist on 21 November last year. Its shares had slumped by 25% over two years as the cost-of-living crisis hit e-commerce and therefore demand for its cardboard boxes.
With a price-to-earnings (P/E) ratio of 6.2 and a yield of 6.2%, I declared I would have bought DS Smith if I didn’t already hold sector rival Smurfit Kappa.
What I didn’t realise is that the DS Smith share price would spike thanks to the proposed merger with US heavyweight International Paper Company.
Susannah Streeter at Hargreaves Lansdown said a decent set of half-year results amid challenging conditions also helped: “DS Smith also made significantly higher cost-savings than investors expected, with further opportunity for efficiency gains.”
Streeter added: “Volumes are showing signs of recovery and merging with IPC will mean it can also make efficiencies by integrating plants and sharing technology.”
We can hardly expect DS Smith to repeat its blockbuster success in 2025. With a higher P/E of 16.45 times and lower 3.34% yield of 3.34%, I’ve missed my chance. So it goes.
My modest portfolio has still beaten the market
British Airways owner IAG is another one that got away. Its shares are up 81%, with the restored dividend lifting the total return to 83%. That’s the fourth-best showing on the FTSE 100.
Barclays is in fifth place. Its shares have risen 73% with a total return of 81%. Sadly, my sector pick was Lloyds Banking Group, which shot itself in the foot over the motor finance scandal.
Now let’s imagine a prescient investor had invested a £20,000 Stocks and Shares ISA in these five heroes right at the start of 2024, putting £4k in each. Today, they’d have a whopping £37,720. That’s a return of 88.6%!
That investor may not exist (or maybe they do). The chances of picking only winners every year are slim to zero. I don’t hold any of these five, sadly, but my portfolio is still up around 20% this year. That’s roughly double the return of a FTSE 100 tracker, and smashes the 4% or so I might have got on cash and bonds. It’s why I buy individual stocks. Now bring on 2025.
