These FTSE 100 shares boosted my portfolio in 2024. Can they do it again?

Having outperformed all his other FTSE 100 stocks last year, our writer considers whether these two stocks will do well in 2025.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Happy young female stock-picker in a cafe

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Despite a strong start, the FTSE 100 climbed only 5.8% in 2024. Most of those gains were made in the first four months, so naturally my top-performing stocks were ones I’d held since January.

After making my final-year portfolio assessment for 2024, I identified two stocks that powered me through the year: 3i Group (LSE: III) and Marks and Spencer (LSE: MKS).

They weren’t the best-performing stocks on the Footsie last year but they are around the top 10. Did they just have a lucky year or is this growth sustainable in the long-term? I decided to investigate.

Should you invest £1,000 in Coca-cola 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 Coca-cola made the list?

See the 6 stocks

A retailer in recovery

Created with Highcharts 11.4.3Marks And Spencer Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Marks and Spencer bounced back in late 2022 after a long period of losses. It’s continued performing well over the past two years and is now at an eight-year high.

Both its food and clothing sectors improved following a business overhaul. Earnings per share (EPS) were up 50% in last year’s final report and are expected to climb further to 29p per share. Revenue’s expected to reach £13.77bn in the final results this March, up from £13.11bn last year.  

For 2025, it’s prioritising digitisation and expansion into new international markets. However, it faces stiff competition from competitors and risks dipping again if inflation spikes. It must continue to find new ways to offer competitive pricing without threatening its bottom line.

It’s price-to-earnings (P/E) ratio’s currently at 13.8. It’s expected to decline to around 12 as earnings increase, below that of Tesco. There may be a sales slump following Christmas but I expect growth will pick up again in February.

Despite a rocky past, Marks and Spencer remains a favourite of mine in 2025. I expect another year of solid performance with steady growth, so I will continue adding to my investment.

A soaring private equity firm

Created with Highcharts 11.4.33i Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

While 3i Group’s technically a private equity investor, it also benefits largely from retail. The company’s the majority owner of Action, a chain of non-food discount stores across Europe. Soaring sales have helped boost 3i’s earnings, pushing the share price up 167% in the past two years.

For the nine months to September 2024, Action’s net sales reached €9.56bn with an operating EBITDA of €1.344bn. But Action isn’t the only winner, with 94% of assets in its private equity portfolio experiencing earnings growth in 2024.

Looking ahead, 3i doesn’t plan on slowing. Key assets such as Action will continue to drive growth while it’s actively exploring new opportunities for investment.

However, it’s important to remain mindful of potential challenges. Market volatility and economic uncertainties are one thing but my main concern is the uneven weighting towards Action. If another discount retailer pops up and captures the market, 3i would take a big hit.

What’s more, some investors have questioned 3i’s valuation methods for Action, suggesting it may be overinflated. 3i has refuted the allegations but it’s something to keep an eye on. 

However, with a strong track record and solid investment thesis, I think it’s well-positioned to continue the strong performance. It’s part of a portfolio I plan to continue drip feeding throughout 2025.

5 stocks for trying to build wealth after 50

The cost of living crisis shows no signs of slowing… the conflict in the Middle East and Ukraine shows no sign of resolution, while the global economy could be teetering on the brink of recession.

Whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times. Yet despite the stock market’s recent gains, we think many shares still trade at a discount to their true value.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.

Claim your free copy now

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.

Mark Hartley has positions in 3i Group Plc and Marks And Spencer Group Plc. The Motley Fool UK has no position in any of the shares mentioned. 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.

Pound coins for sale — 51 pence?

This seems ridiculous, but we almost never see shares looking this cheap. Yet this recent ‘Best Buy Now’ has a price/book ratio of 0.51. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 51p they invest!

Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.

What’s more, it currently boasts a stellar dividend yield of around 8.5%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?

See the full investment case

More on Growth Shares

Investing Articles

Up 30% in weeks, does the BAE Systems share price still offer value?

The BAE Systems share price has been on a tear over the past couple of months. This writer sees limited…

Read more »

Investing Articles

£10,000 invested in Rolls-Royce shares 5 years ago is now worth…

Rolls-Royce shares have been on fire since April 2020. Part of this is the result of pandemic restrictions lifting, but…

Read more »

Investing Articles

£20K invested in Tesla stock last April is now worth…

Despite all the bad headlines lately, Tesla stock has put in a storming performance over a 12-month timeframe. Is this…

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

Is Fundsmith Equity still a good choice for a Stocks and Shares ISA in 2025?

Many Britons hold the Fundsmith Equity fund in their Stocks and Shares ISAs. Is this still a good move? Edward…

Read more »

Investing Articles

Prediction: Unilever to outperform the FTSE 100 over the next 12 months

The FTSE 100 has made a strong start to 2025, but Stephen Wright thinks a popular dividend stock could be…

Read more »

Young black man looking at phone while on the London Overground
Investing Articles

2 beaten-down stocks to consider for an ISA after the massive market sell-off!

The stock market has had a sudden meltdown! Yet our writer thinks these two growth stocks look attractive candidates for…

Read more »

Investing Articles

These FTSE 100 stocks could be the winners from Trump’s tariffs!

President Trump’s unpopular tariffs caused mayhem on the world’s stock markets this week. But some FTSE 100 stocks bucked this…

Read more »

Investing Articles

Are these 3 sold-off UK shares secretly screaming buys?

Despite the FTSE 100 rising, there are still plenty of struggling UK shares. But are these three sold-off stocks potential…

Read more »