Are these the best UK shares to watch in December 2024?
A selection of some of the best dividend, growth and value UK stocks to watch this month. These companies have been selected for recent market news.
In winter 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 GDP expected to rise 1.1% by the end of the year.
For context, 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, interest rates have been dropped a further 0.25 basis points to 4.75 but with recent inflation figures showing that it’s on the rise, having reached 2.3% due to higher energy bills, there’s an expectation that they will be held at 4.75% when the BOE next meet on 19 December.
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.
Top dividend stocks
M&G (LON: MNG)
In its H1 results, savings and investment company M&G reported a 3.7% increase in assets under administration reaching £346bn, up from £333bn the year before. Underlying operating profit dropped 4% but remained higher than market expectations.
Looking ahead, M&G are looking to grow its Asset Management and Wealth side of the business so that it accounts for 50% of the business (it currently accounts for 42%). The company is also looking to phase out its annuity portfolio and legacy products.
In October this year, MGN paid out a dividend of 6.60p, up from 6.50p the year before. The company have a cover ratio of 3.8 which suggests that its well placed to continue its strong dividend payments into 2025.
Our analysts have given the stock a buy rating with an average price target of 238p in the next 12—month period, up 19.42% from its current value.
Dividend yield: 13.2%
Dividend cover ratio: 3.8
Phoenix Group (LON: PHNX)
Savings and retirement company Phoenix Group reported strong H1 results for the 6 months ending 30 June 2024. Operating profits increased by 15% year— on— year to £360 million, driven by growth in Savings, Pensions and Retirement solutions. Cash generation also increased, reaching £950 million, and the company is expected to meet the upper end of its £1.4— 1.5 billion target for 2024.
In its H1 results, savings and retirement company Phoenix Group reported impressive results. Operating profits reached £360 million, up 15% year—on—year.
On 31 October this year Phoenix Group paid a dividend of 26.65p, up from 26.00p the year before. With a cover ratio of 4.6 the company appears well positioned to offer strong dividend payments into 2025.
Phoenix Group paid a dividend of 26.65p on 31 October this year, up from 26p year—on—year. The company has a cover ratio of 4.6 indicating that its well positioned to continue strong dividend payments into next year.
Dividend yield: 10.6%
Dividend cover ratio: 4.6
Top growth stocks
Bank of Georgia
The Bank of Georgia has reported strong Q3 results bringing in a consolidated profit of £455.29m, up 42.5% year—on—year. Since 2021, the company has reported strong revenue growth, and this trend is likely to continue with revenue for the end of 2024 expected to grow by 34.30%.
The stock has been volatile over the past few months due to uncertainties on the country’s political direction and the impact this decision will have upon the economy. Now that the threat of a political upheaval seems to have receded slightly, shares have recovered.
Whilst there is great growth potential for this stock, its success is largely dependent on whether Georgia chooses to align more closely with the EU or Russia.
Our analysts have given the stock a buy rating, with a potential upside of 17% from its current value in the next 12—month period.
TBC Bank Group
TBC Bank reported strong Q3 results with net profit rising to 15.6% year—on—year to £98 million. Net income reached £492.56 million, up 15.1% from the same time previous year.
Since 2021 TBC Bank has reported a revenue growth over 14% each year. 2024 is likely to be no different, with revenue growth expected to reach 16.26% by the end of the year. With an ROE of 25.9%, the company is likely to remain profitable and indicates growth potential in the coming months.
Our analysts have given the stock a strong buy rating with a potential upside of 27% in the next 12—month period.
Top value stocks
Card Factory
Retail company Card Factory reported mixed H1 results with revenue increasing by 6% year—on—year to £233.8 million and online sales increasing by 9%. However, a rise in the living wage resulted in a 40% decrease in operating profit.
Card Factory has a P/E ratio of 7.7, which is below the industry average of 13.52. It’s P/B ratio 1.0. These fundamentals indicate that the stock is undervalued relative to its assets and its stock price could increase in the coming months.
Our analysts have given the stock a strong buy rating with a predicted upside of 30.49% over the next 12—month period.
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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.
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*Based on revenue excluding FX (published financial statements, October 2021).
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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