Top 10 Best UK Shares to Watch in 2024

With a new Labour government in the UK seeking to grow the UK economy by investing in business, it is a good time to investigate what could be the best shares to buy right now in the UK. But how do you find the best UK stocks to invest in? An investor can never truly know beforehand but below is a list of the top 10 best stocks to watch and build your research on.  

It’s worthwhile remembering that past performance is not a reliable indicator of future performance and that all forms of investing involve winning and losing so be sure to exercise proper risk management when building your investing portfolio.

Best UK Companies to Watch

Thinking about the best shares to buy right now UK? Below is a list of the top 10 best UK stocks which are experiencing a heightened level of volatility, management changes and/or significant changes in their industry. 

How do we choose our best shares?

To identify the best shares we have used a combination of fundamental analysis and technical analysis. First of all, the shares need to have a high trading volume to ensure sufficient liquidity from larger institutional speculators. Stocks with a high trading volume can mean that there is a lot of buying and selling activity on the stock due to a number of different reasons. These could be reallocation from mutual and pension fund managers or director buying and selling.

The chosen shares are also well-known stocks in the UK. This is important as it is easier to keep track of these companies as they are regularly written about in financial media. New product launches and good or bad earnings announcements are important to track as they can heavily influence the share price. We have also chosen shares that exhibit good technical analysis characteristics which ensures investors and traders are actively buying and selling the stock. 

Top 10 Best UK Stocks to Watch in 2024

1. Rolls Royce Plc

• Sector: Aerospace
• Market Cap: £26 billion
• Dividend Yield: n/a
• Price to Earnings Ratio (TTM): 15.61
• YTD: 2.82%

Established in 1906, Rolls-Royce Holdings Plc (RR) is a British multinational engineering company. It specialises in producing jet engines for civil and military aircraft, as well as power systems for the civil and defence sectors. The share price was one of the top performers of 2023, rising more than 191%, outperforming the broader FTSE 100 index. 

The company struggled over the pandemic period but has started to recover with the upturn in airline travel. Rolls-Royce does not currently pay dividends. Some analysts are forecasting the rise in its share price may warrant paying dividends in the future. This has made Rolls-Royce shares a top UK stock to watch this year. 

2. HSBC Plc

• Sector: Banks
• Market Cap: £116 billion
• Dividend Yield: 3.91%
• Price to Earnings Ratio (TTM): 5.43
• YTD: -3.09%

HSBC Holdings Plc (HSBA) is a British multinational bank considered the largest in Europe with nearly $3 trillion in assets. Its share price performed well in 2023, largely due to rising interest rates. This tends to help banking stocks outperform as it means the bank can lend out at a higher interest rate than what they borrow which helps to increase their margins and profitability.  

Last year, the bank reported profits of nearly $14 billion. Some analysts believe this could help the bank’s dividend to return to pre-pandemic levels. Currently, the bank pays a quarterly dividend of GBX 5.42 which is an annual dividend yield of 3.91%. Analysing price activity around central bank announcements this year could be key in determining sentiment and portfolio allocation of HSBC shares.  

3. BP Plc

• Sector: Oil and Gas
• Market Cap: £81 billion
• Dividend Yield: 4.70%
• Price to Earnings Ratio (TTM): 6.99
• YTD: 2.84%

BP Plc (BP) is one of the major energy giants in Europe and around the world. The oil company’s share price crashed during the pandemic to lows not seen since 2000. However, oil company profits have been boosted by the surge in oil prices during the pandemic recovery and the Russia-Ukraine war. While European energy giants such as BP have benefitted from rising oil prices, they are still trading at valuations much lower than their US counterparts such as Chevron and Exxon. 

European energy stocks have held up well even though governments are trying to claw back some of those profits through windfall taxes to help with subsidies and price caps for rising energy bills. However, potential future governments trying to force through a windfall tax has led to some comments from energy companies that this may result in lower investment in that particular country. While that is likely to affect the country’s economy more than corporate profits it could be cause for concern if the battle escalates. 

4. Vodafone Group Plc

• Sector: Telecommunications
• Market Cap: £17 billion
• Dividend Yield: 12.00%
• Price to Earnings Ratio (TTM): 1.94
• YTD: -7.20%

Vodafone (VOD) is a British multinational telecommunications company providing services in Europe, Asia, Africa and Oceania. At the start of 2024, the Vodafone share price was trading at GBX 68.56 - lows not seen since 1997. As the share price is trading at such a low price level it has helped the dividend yield rise to 12.00%. 

The recent change in management could help to revive its fortune in some of its biggest markets, helping to grow its bottom line. The telecommunications company has also offloaded stakes in Vantage Towers and is in talks to sell its stake in Africa’s Vodacom. In general, telecommunication companies have struggled to adapt to the use of internet-based text messaging and voice calls. It will be interesting to see how the company deals with this to provide shareholder value.

5. International Consolidated Airlines Group SA 

• Sector: Airlines
• Market Cap: £7 billion
• Dividend Yield: n/a
• Price to Earnings Ratio (TTM): 4.35
• YTD: -7.53%

IAG (IAG) is an Anglo-Spanish multinational airline stock which operates airlines such as British Airways, Iberia, Aer Lingus and Vueling among others. IAG’s stock price crashed during the pandemic period due to lower air travel and global lockdowns. The reopening of the global economy has helped boost airline share prices with IAG starting 2024 at GBX 155.00, up around 78% from its pandemic low.

While most analysts are forecasting airline travel to increase – especially with China reopening its economy – there are still some uncertainties around energy prices and the more lucrative income stream for airlines, business travel. Remote working has impacted business travel which is an area that provides the highest profit margin for airlines. The trend in office and remote working is important to track to determine future travel demand.

6. Shell Plc

• Sector: Oil and Gas
• Market Cap: £161 billion
• Dividend Yield: 4.11%
• Price to Earnings Ratio (TTM): 10.97
• YTD: -2.45%

Royal Dutch Shell (SHEL) was founded in 1907 and operates in over 70 countries. It is one of the world's largest energy companies and is involved in the exploration, refining and distribution of oil and gas. It has key sites in the North Sea, Gulf of Mexico and other parts of the Middle East, Asia and Africa.

The stock performed well last year, helped by higher energy prices. As such, it has a long track record of paying dividends and share buybacks. However, the public, some governments and environmental campaigners are highlighting the environmental concerns of using fossil fuels. Shell has invested in renewable energies but it is likely to be a key factor in the trend of its long-term share price. 

7. Unilever Plc

• Sector: Consumer Goods
• Market Cap: £99 billion
• Dividend Yield: 3.72%
• Price to Earnings Ratio (TTM): 14.25
• YTD: 4.54%

Unilever (ULVR) has products that are sold in over 190 countries. It is a consumer goods company with a broad range of consumer products from food, home and personal care and more. Its more than 400 brands include Dove, Persil, Ben and Jerry's, Magnum and Lipton. Unilever is a constituent of the UK FTSE 100 index and the Netherlands AEX 25 index. 

The company's share price is hugely influenced by consumer trends and spending habits. Inflation also has a large impact on its share price as it determines the sale price of its goods and whether the higher costs of labour and materials should be passed on to the consumer. 

8. Glencore Plc

• Sector: Mining
• Market Cap: £48 billion
• Dividend Yield: 10.46%
• Price to Earnings Ratio (TTM): 6.20
• YTD: -15.52%

Glencore (GLEN) was founded in 1974 and is one of the world's largest commodity trading and mining companies. It operates across a diverse range of sectors including energy, agriculture and metals. It is mostly known for the production, refining and transportation of copper, zinc, coal, oil, cobalt and grains. 

Its share price can be volatile due to the underlying volatility of the commodity sector. Regulatory changes, environmental issues and geopolitical instability all influence the stock price of mining companies. Therefore, it is important to track these fundamental issues over the years. 

9. Diageo Plc

• Sector: Beverages
• Market Cap: £64 billion
• Dividend Yield: 2.82%
• Price to Earnings Ratio (TTM): 20.31
• YTD: 2.06%

Headquartered in London, Diageo (DGE) is a global alcoholic beverage company. Its brands include Baileys, Johnnie Walker, Guinness, Captain Morgan, Smirnoff, Casamigos and many others. It operates from 120 different sites around the world. Its success is largely down to its dominance of the alcoholic beverage sector as it maintains a very high market share with little competition. 

Changing consumer preferences impact its share price as the demand for certain products changes. For example, the trend toward healthier beverages can impact the demand for Diageo's products. Furthermore, the price of its premium products can be affected by the state of the economy. 

10. AstraZeneca Plc

• Sector: Pharmaceuticals
• Market Cap: £147 billion
• Dividend Yield: 2.40%
• Price to Earnings Ratio (TTM): 30.87
• YTD: -11.17%

Founded in 1999, AstraZeneca is headquartered at the Cambridge Biomedical Campus in Cambridge, England. The Anglo-Swedish pharmaceutical and biotech company is involved in the research, development, testing and marketing of various medicines covering autoimmune, cardiovascular and respiratory diseases. 

The company has a vast portfolio of patented and generic medications. Its biggest product is Tagrisso which is used in oncology medications and brings in more than $13 billion a year. AstraZeneca invests heavily in research and development of new treatments which may fail at clinical trials or struggle with regulatory approvals. The pharmaceutical sector is highly competitive but AstraZeneca does have a suite of products vital for different patients. 

How to Find the Best Companies to Invest in Today

To identify the best shares to buy, thorough research and analysis should be done on the stock's past, present and future situation. Even then there is no guarantee of the future outcome and losses will be an inevitable part of investing. However, what elements need to be analysed also depends on the individual style of the investor.

• A long-term investor may focus on financial performance metrics and will want to see a growing earnings per share figure.
• A short-term investor may forego fundamental analysis and focus purely on technical analysis which studies price behaviour and chart patterns for clues on buying and selling activity. 

Below are a few strategies that investors could use to pick stocks. As all types of investing involve risk, it can be useful to practice on a demo trading account. This allows you to buy or sell in a virtual environment until you are ready and confident to trade with real funds. 

Identify New Revenue Streams

A key part of any business growth is not only to maintain current income streams but to also build new ones. This could be by opening new stores, launching new products and simply offering more services to more people around the world. If the growth plans are successful then this could be reflected in higher revenue and profit margins for the company. This in turn may lead to a higher share price. 

Therefore, it can be useful to choose just a few companies you are familiar with or one specific sector to focus on. This will be helpful to stay up to date with new developments and the impact it has on a share price. For example, the growth in AI-related has helped increase the profitability of many tech companies, boosting their share price. 

Analyse Financial Ratios

Many investors choose to try and systemise their stock picking by analysing the financial performance of a company. This bottom-up approach involves using the vast array of financial metrics and ratios that analysts use. A few include:

• Price to Earnings Ratio (P/E): This compares a company's share price with how much profit it is making. A low P/E could mean the company is undervalued as you are paying less for the amount of profit the company is generating. Ideally, this needs to be compared to the company's sector P/E ratio. 
• Price to Book Ratio (P/B): This compares a company's stock price to its book value which is the value of its assets minus liabilities, divided by the total number of shares issued. The metric informs the investor on how much money they would get if the company was liquidated. 
• Dividend Yield: The dividend yield is calculated by dividing the annual dividend by the share price. It provides a rough indicator of how much an investor will get paid to simply own the shares. 

Study Share Price Behaviour

When choosing the best shares to buy now, short-term investors may study the historical behaviour of a stock's price to identify clues on future behaviour. This is known as technical analysis. There are many different chart patterns, price action patterns and technical indicators that can be used to analyse a stock's price. 

Chart patterns include ascending and descending triangle formations, wedge patterns, ranges, head and shoulders and others. These study the flow of price movement to analyse the behaviour of investors to help ascertain who is in control of the market - buyers or sellers. Technical indicators include the Stochastic Oscillator, MACD, RSI and many others. These are mathematical formulas that analyse price behaviour to give readings on overbought or oversold conditions, divergences and momentum. 

How to Buy Shares in 6 Steps

Once you have established the best shares to buy now UK, that are suitable for your own investment portfolio and risk tolerance levels, how do you purchase them? This is where a UK share dealing account comes in handy. With Admirals, you can: 

• Buy UK stocks with a commission of 0.1% of the trade value and a low minimum transaction fee of GBP 1.0.  
• Buy US stocks with a commission of $0.02 per share with a low minimum transaction fee of USD 1.0.  
• Collect dividend payments from companies that pay out dividends.

Here is a 6-step process to get started. 

1. Choose a broker

When investing in UK shares it is wise to use a regulated broker from a well-known financial authority as this will provide the highest level of safety and security. The Admirals Group has entities licenced by multiple top-tier regulators around the world. For example, Admiral Markets UK is authorised and regulated by the UK Financial Conduct Authority (FCA). 

2. Open your account

You can open an account with Admirals in just a few steps. There is a simple questionnaire to fill in to complete your application. The questions include personal details, address, employment, source of funds, levels of experience and more. It can be done in just a few minutes. 

3. Deposit your funds

With Admirals, you can deposit funds with zero fees using bank transfer, Visa/Mastercard, Klarna, PayPal, Skrill, Neteller, iDEAL and others. Funds can be held in the Admirals Wallet and transferred to different currency accounts, as well as gold. 

4. Research your stocks

It is important to do thorough research on the stocks you want to buy. This could be done by using fundamental or technical analysis. There are many online resources available to help pick stocks but it is important to identify your style, strategy and risk tolerance levels first. 

5. Search for your stocks

After logging in to your Admirals account, click Trade next to the account name. This will open the Admirals MT5 web trading platform. You can search for thousands of stocks from 16 of the world's largest stock exchanges. The platform offers top charting capabilities, different timeframes and multiple technical analysis indicators. 

6. Buy your chosen shares

The Admirals MT5 web trader platform allows you to purchase shares using its simple trading ticket. UK shares can be purchased with just 0.1% commission of the total trade value and a low minimum transaction fee of £1. 

Continue Reading:

• Best UK Stocks for Dividends
• Best Short-Term Investments UK
• Top 10 Penny Stocks UK
• Best Small Cap Stocks UK
• Top 20 Biggest Companies in the UK
• Best UK Tracker Funds
• Dividend Investing Guide
• Best UK Stocks for Dividends
• Best Dividend ETFs
• Best UK Shares

FAQs on Best UK Stocks to Buy 

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