ALERT! Here are the best performing UK stocks over the last decade

Paul Summers takes a closer look at the shares you wish you’d bought back in 2010.

| 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.

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.

Brand new research from financial data firm Refinitiv makes for compelling reading, particularly if you’re an investor with the vast majority of your wealth invested in UK-focused shares.

According to its analysts, the FTSE 250 — the second tier of companies listed on the London Stock Exchange — was one of the leading global indexes over the last decade. Not only was its 12% annualised return comparable with that of US equities (the S&P 500 returned the most with 13.6%), it also significantly outperformed the more internationally-focused FTSE 100 (7.4%).

As good as these numbers are, however, they pale in comparison to what investors could have achieved had they had the skill or good fortune to buy and hold the best performing UK-listed companies.

Should you invest £1,000 in Unilever 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 Unilever made the list?

See the 6 stocks

Let’s take a closer look at the three biggest winners since 2010.

On the podium

In third place is online property portal Rightmove (LSE: RMV). Thanks to its virtual monopoly in the UK, the company achieved a compound annual growth rate of 30.52% over the period. When it’s considered that the housing market hasn’t exactly boomed since 2010 (quite the opposite in some parts of the country), that’s some result.

Right now, shares trade on a forecast 30 times earnings. That might look expensive but it does begin to make sense when the company’s long history of generating huge returns on the capital it invests is considered. Operating margins are consistently above 70%, there’s stacks of cash on the balance sheet and very little debt.

A valuation approaching £6bn suggests management might struggle to replicate this incredible growth going forward, but I suspect the firm’s dominance of its industry means it will continue rewarding investors. Indeed, the recent uplift in sentiment in the housing market following the election can only be good news for Rightmove.

Boasting a compound annual growth rate of 32.34%, the company providing the second-highest returns was Melrose Industries (LSE: MRO). For those unfamiliar with the name, the £12bn FTSE 100 business specialises in buying manufacturing firms with strong fundamentals and then setting out to improve their performance.

Based on its price movement over the last decade, you could say Melrose is pretty good at what it does. Back in January 2010, the stock could be yours for around 18p. Today, it’s available for 233p.

With shares currently trading on 16 times forecast earnings (and coming with a seemingly-secure 2.1% yield, covered well over twice by profits), I think there’s still money to be made. Indeed, management reported in November that recent trading had been in line with expectations.

And the winner is…

Occupying top spot on the list of best performing shares is equipment rental company Ashtead (LSE: AHT).

According to Refinitiv, £1,000 invested in the firm at the beginning of 2010 — when the shares were trading around 85p a pop — would be worth around £35,611 at the end of 2019, assuming all dividends had been reinvested (something we heartily recommend at the Fool UK). All told, the company achieved a staggering compound annual growth rate of almost 43% over the period. 

Can Ashtead’s outperformance continue? Its latest results were certainly encouraging, with the company posting a 14% rise in revenue (to £2.68bn) and 6% rise in pre-tax profit (to £690m) over H1. What’s more, the stock trades on just 12 times earnings. Considering the high profit margins the company is able to achieve, that still looks great value to me.

Should you buy Unilever now?

Don’t make any big decisions yet.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — has revealed 5 Shares for the Future of Energy.

And he believes they could bring spectacular returns over the next decade.

Since the war in Ukraine, nations everywhere are scrambling for energy independence, he says. Meanwhile, they’re hellbent on achieving net zero emissions. No guarantees, but history shows...

When such enormous changes hit a big industry, informed investors can potentially get rich.

So, with his new report, Mark’s aiming to put more investors in this enviable position.

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation 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.

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK owns shares of Melrose. The Motley Fool UK has recommended Rightmove. 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.

More on Investing Articles

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Investing Articles

Here’s how a 40-year-old could start investing £100 per week to retire early

If a 40-year-old decides to start investing today, here's how they could potentially turn £100 a week into over £500k…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

The FTSE 100 is up 60% in 5 years. Here’s why — and a big lesson!

The flagship FTSE 100 index has put in a very strong performance over five years. There's a specific reason for…

Read more »

Investing Articles

How much do investors need in an ISA to earn a £2,500 monthly passive income?

Charlie Carman explores how investors could strive for £30k in tax-free passive income each year from a dividend stock portfolio.

Read more »

Investing Articles

How much would a 45-year-old need to invest in an ISA to earn a £1k monthly passive income at 65?

Harvey Jones looks at how much an investor would need to put away every month to build a steady passive…

Read more »

Investing Articles

3 things to do ahead of the new 2025-26 ISA year

It's time for us all to put on our investing boots and get to work on developing our plans for…

Read more »

Older couple walking in park
Investing Articles

Is £150,000 enough to generate £1,000 a month in passive income?

Stephen Wright takes a look at three UK stocks with dividend yields above 8% that passive income investors might be…

Read more »

Investing Articles

Aim to earn a £50k second income in retirement by investing just this much each month

Even with a small monthly investment, it’s possible to earn a £50k second income with a successful investment strategy and…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

Down 22% in a month! Is this my chance to buy shares in this FTSE 100 outperformer?

Shares in InterContinental Hotels Group have outperformed the FTSE 100 over the long term. So is a chance to buy…

Read more »