Are these the best UK shares to watch in October 2024?

In autumn 2024, the UK’s economic landscape continues to deliver a mixed outlook. After the country slipped into a technical recession at the back of end of last year, the UK economy has now bounced back — with gross domestic product (GDP) rising by 0.5% since January.

For context, consumer price index (CPI) inflation fell, reaching its target figure of 2% in May, down from a high of 11.1% in October 2022. As a result, The Bank of England cut interest rates by 0.25 basis points to 5% on 2 August, the first rate cut there’s been in over 4 years.

Since then, inflation has risen to 2.2% as last years cheaper energy prices fall out of annual comparison. Whilst further interest rate cuts are likely in the coming months, there’s some concern inflation may continue to creep up. If this happens rate cuts will be less frequent and by fewer basis points.

Best UK shares to watch

Considering these issues, here are five UK shares we think are worth watching. These dividend, growth or value shares have been selected from recent market news. Always do your own research. Past performance is not a guide to future performance.

1. British American Tobacco

2. HSBC

3. Beazley

4. STV Group

5. GB Group

Top dividend stocks

British American Tobacco

British American Tobacco saw a 0.8% drop in revenue for the first half of this year, and sales of traditional cigarettes decreased by 2.6% as volumes in the US, their main market, are down 9% and the company fights to maintain their market share.

Despite the small, single figure drop in revenue and sales, the company has made no change to their full year guidance and expects to grow in the final half of the year, as they see the benefits of H1 investments and introduce new or improved new categories products onto the market.

However, these New Category products which helped to offset lower revenues from traditional combustibles, have come under increased scrutiny with the UK announcing a ban on disposable vapes and imposing a vape tax. Profit margins may be hit as this new legislation comes into place.

Following their recent H1 results shares were up 2.8%. Further gains are possible and the company’s substantial dividend of 58.88p per share is a key attraction.

Our analysts view the stock in a buy rating with a price target of 2865.00p, in the next 12-month period, up 3.83% from its current price.

Dividend yield: 8.21%

Dividend cover: 1.59

HSBC

During Q2 HSBC Holdings brought in a revenue of $16.5 billion, up 5% year-on-year. Profit before tax increased also increased and was up 7% reaching a total of $8.9 billion. This exceeded analyst expectations of $7.8 billion. Net interest remained flat.
The company’s strong performance can mostly be attributed to the Wealth and Investment Banking parts of the company and the fees they charge.

On top of this, HSBC have recently announced an interim dividend of $0.10 per share and a $3 billion share buyback.

With global interest rates on their way down and the possibility of fresh tensions between the US and China, new CEO Georges Elhedery will face some difficult challenges within his first few months as CEO, and it’ll be interesting to see the impact this will have upon future dividend payments.

Our analysts have given the stock a buy rating with a price target of 747p in the next 12—month period.

Dividend yield: 7.02%

Dividend cover ratio: 1.89

Top growth stocks

Beazley

Insurance provider Beazley offers insurance and reinsurance services to industries such as technology, media, transportation and telecoms.

Its strong H1 results saw profit before tax almost doubling year-on-year to $728.9 million, up from $366.4 million the previous year, this was mostly driven by an increase in insurance written premiums. Return on equity reached 28%, up 10% from the previous year and the company remain on track to meet its full year guidance.

Its share price has increased by 42% over the past year, but its P/E ratio remains low at 4.82. This is mostly due to the high-risk nature of the insurance sector where a couple of large claims could significantly impact profits.

Our analysts have given the stock a buy rating with a predicted price of 934p in the nest 12-month period, up 21.86% from its current price.

STV Group

Digital media company STV Group specialise in production, broadcasting, advertising sales and online services and offer a public service channel to central and northern Scotland.

The company reported strong H1 results with revenue increasing by 20% year-on-year to £90.4 million due to success in its Broadcast, Studios and Digital divisions. Operating profit increased by 33% reaching £10.6 million driven by the group’s successful growth strategy.

Going forward, STV Group remain on track to meet its full year guidance with continued growth in profits and revenue expected.

The company’s share price is up almost 28% year-to-date and our analysts have given the stock a buy rating indicating that further growth is expected.

Top value stocks

GB Group

GB Group provides data intelligence solutions which help business manage individual identities during important transactions. Its operations are split into 3 main segments: location, identity and fraud.

The company reported a strong full-year performance brining in a revenue of £277.3 million due to significant growth in its identity segment during Q4. Its operating profit exceeded market expectations for this period.

Looking ahead, the company remain optimistic about future growth opportunities with non-executive chair Richard Longdon claiming that “The technological capabilities we have built and our highly repeatable business model will enable us to capitalise upon the significant growth opportunities ahead to deliver significant and enduring shareholder value.”

GB Group has continued to perform well in Q1 of FY25 and with all financials in line with market expectations.

How to invest or trade in UK shares with us

1. Learn more about UK shares

2. Open an account with us or practise on a demo

3. Select your opportunity

4. Choose your position size and manage your risk

5. Place your deal and monitor your trade

You can either invest in shares directly or trade using spread betting or CFDs to benefit from leverage.

Keep in mind, leverage means you can gain or lose money faster than expected. Because your position size is far greater than your deposit, you could lose more money than you put in. Be aware also that past performance is not an indicator of future returns.

Learn more about the differences between trading and investing here.

Top shares to watch summed up

The above five companies are just a small selection of top stocks to watch. Remember that any company can also fail and always do your own research.

Trade and invest in over 17,000 UK, US and global shares from zero commission with us, the UK’s No.1 trading provider.* Learn more about trading or investing in shares with us, or open an account to get started today.

*Based on revenue excluding FX (published financial statements, October 2021).