Best FTSE 100 stocks to watch in 2025

FTSE 100 performance overview

The Financial Times Stock Exchange (FTSE)100 remains a popular index globally, delivering a total return of 9.7% in 2024. This marked its best performance since 2021, when it returned 18.4%.

FTSE 100 companies are usually well-established with strong brand recognition, large economies of scale, and proven business models. They are also reliable dividend payers, with FTSE Russell data indicating that roughly75% three-quarters of FTSE 100 corporate income comes from overseas.

The FTSE 100 has low exposure to technology stocks, making it a popular complement to the S&P 500.

FTSE 100 versus S&P 500 in tough markets

While the FTSE underperformed compared to the Standard & Poor's (S&P) 500, which delivered a total return of 25%, it's worth noting that the FTSE 100 has historically performed better in adverse conditions. For example, in 2022, the United Kingdom's (UK) premier index rose by 1% while the S&P 500 decreased in value.

Top FTSE 100 stocks to watch

These are the 10 largest companies on the FTSE 100 by market capitalisation at the start of 2025.

AstraZeneca (LON:ASX)

AstraZeneca is perhaps the UK's most well-known success story. The global pharmaceutical company specialises in developing novel treatments across oncology, cardiovascular, renal, and respiratory diseases. It boasts a strong pipeline of new drugs, and consistent revenue growth arguably makes the company an attractive investment for those seeking exposure to the healthcare sector.

Half-year results

• Total revenue: $25.6 billion
• Total revenue gorowth: 18% year-over-year (YoY) , driven by an 18% increase in product sales and continued growth in alliance revenue from partnered medicines.

Almost half of the revenue growth came from advances in oncology and cardiovascular, renal, and metabolism.

Shell (LON:SHEL)

Shell is one of the world's leading energy companies and the larger of the two oil majors on the FTSE 100. It engages in the exploration, production, refining, and marketing of oil and natural gas and is also at the forefront of renewable energy solutions. Its diversified energy portfolio and consistent share buybacks ensure that the stock remains in the top ten.

Third-quarter (Q3) 2024 results

Shell announced another $3.5 billion buyback programme, marking the twelfth consecutive quarter with buybacks of $3 billion or more.

• Cash flow from operations (CFFO): $14.7
• Working capital inflow: $2.7 billion (included in CFFO)

HSBC Holdings (LON:HSBA)

HSBC is a major international bank offering a wide range of financial services, including retail banking, wealth management, and global banking. Its extensive global network and diversified revenue streams attract defensive investors, and its large footprint makes it a relatively safe investment. HSBC remains Europe's biggest bank by assets under management.

Q3 2024 results

• Rvenue: $8.5 billion
• Revenue growth: 11% YoY
• Common equity tier 1 (CET1) capital ratio: 15.2%

Unilever (LON:ULVR)

Unilever is a multinational consumer goods company with a diverse portfolio of brands in food, beverages, cleaning agents, and personal care products - including Dove and Magnum. Its strong brand recognition, global reach, and focus on sustainability make it a popular portfolio component among UK investors.

Q3 2024 results

• Revenue: $16 billion
• Revenue growth: 4.5% YoY.

The company also plans to sell its premium ice cream business to realise further value.

Relx (LON:REL)

Relx may not be a household name, but it is a global provider of information-based analytics and decision tools for professional and business customers across many industries. It may gain popularity as the artificial intelligence boom takes off.

Half-year results

• Revenue: $6.03 billion
• Revenue growth: 7% YoY
• Operating profit: $1.59 billion
• Operating profit:growth: 10% YoY

BP (LON:BP)

BP is the second FTSE 100 oil major, involved in the exploration, production, and marketing of oil and natural gas, alongside investments in renewable energy. Its commitment to transitioning towards sustainable energy solutions and a strong dividend history makes BP a popular stock for income-focused investors.

Q3 2024 results

• Underlying replacement cost profit: $2.3 billion
• Operating cash flow: $6.8 billion
• Share buyback: $1.75 billion

British American Tobacco (LON:BTI)

British American Tobacco is a leader in tobacco and increasingly in new categories of non-traditional nicotine-based products such as vapes. It manages brands including Dunhill, Kent, and Lucky Strike, although it faces challenges in key countries due to legislation and changing consumer preferences affecting cigarette sales.

Half-year results

• Revenue: $16.04 billion
• Revenue growth: -8.2% YoY

The negative was driven by the sale of businesses in Russia and Belarus in September 2023 and translational foreign exchange headwinds.

Chief Executive Officer (CEO) Tadeu Marocco notes the company is 'building a smokeless world,' having added 1.4 million consumers to its smokeless brands, now accounting for 17.9% of group revenue, an increase of 1.4 percentage points compared to the full year 2023.

London Stock Exchange Group (LON:LSEG)

The London Stock Exchange Group is a diversified international market infrastructure and capital markets business, providing services including trading, clearing, and information services. It is the exchange that hosts the FTSE 100. Its strategic acquisitions and focus on data and analytics have strengthened it in recent years, although some investors are concerned about London's ability to retain and attract quality companies.

Half-year results

• Revenue: $11.17 billion
• Revenue growth: 7.1% YoY
• Free cash flow: $989 million
• Free cash flow growth: 29%

Rio Tinto (LON:RIO)

Rio Tinto is a leading global mining group focusing on extracting and processing metals including iron ore, aluminium, and copper. Its strong balance sheet and the growing electrification of the world’s economy make Rio Tinto a key FTSE 100 stock for many investors, though it has faced several environmental, social, and governance (ESG) concerns over the years.

Half-year results

• Revenue: $12.1 billion
• Operating net cash: $7.1 billion
• Interim ordinary dividend: $2.9 billion, representing a 50% payout.

Diageo (LON:DGE)

Diageo is a multinational alcoholic beverage company controlling famous brands including Johnnie Walker, Smirnoff, Captain Morgan, Baileys, Tanqueray, and Guinness.

The company operates in 180 countries and is a major player in the premium drinks segment. However, it has struggled in South America in recent years, and like its rivals, it faces challenges with changing consumer tastes in key markets.

Half-year results

• Net sales: $20.27 billion
• Net sales growth: -1% YoY

For the first and second halves of 2024, organic profit fell by 5.4% and 3.9% YoY, respectively. However, the company notes that some of this decrease is due to strategic investments made to generate long-term growth.