Interactive Investor

Best and worst FTSE 100 shares of 2021

23rd December 2021 09:15

Graeme Evans from interactive investor

Exactly half of all FTSE 100 constituents generated double-digit returns over the year, but there were big losers too. Here are the major movers of 2021.

A year of progress for the FTSE 100 index was led by Ashtead Group (LSE:AHT), Croda International (LSE:CRDA) and Glencore (LSE:GLEN) after their shares benefited from exposure to the rebuilding of the global economy.

US-focused plant hire firm Ashtead set the pace with a 72% rise in the year to Monday 20 December, while speciality chemicals business Croda and miner Glencore are more than 50% higher.

In contrast, the pandemic gains of 2020 reversed to leave Paddy Power betting firm Flutter Entertainment (LSE:FLTR) down 27% as the worst of the stocks currently listed in the FTSE 100 index.

Its fall came in just ahead of grocery warehouse technology business Ocado Group (LSE:OCDO) and GKN owner Melrose Industries (LSE:MRO), while London Stock Exchange Group (LSE:LSEG) is 25% down amid the cost challenges of integrating data acquisition Refinitiv. The re-opening trade, which many investors had backed at the start of the year, also failed to deliver as British Airways owner IAG (LSE:IAG) fell 18%.

Overall, the FTSE 100 index experienced a much better year after rising by 13%, buoyed by the economic improvement, easing of Brexit fears and a pick-up in M&A activity focused on UK assets. Even so, the top flight lagged the record-breaking levels seen on Wall Street.

The performance of two stocks in particular will have cheered many ii customers after widely-held Royal Mail (LSE:RMG) rose 49.1% and Glencore easily outperformed the wider mining sector.

Whereas Rio Tinto (LSE:RIO) shares are down 11% across 2021 amid pressure on iron ore markets, Glencore has benefited from its exposure to record prices for coal and aluminium following the knock-on impact of power shortages in China.

Glencore also has a leading position in transition metals that will be central to decarbonisation efforts, with top five positions in copper, cobalt, zinc and nickel. Prices have been rising sharply, with nickel the heaviest component of a lithium ion battery.

With the company's debt reduction efforts nearing completion, analysts are modelling total shareholder returns in 2022/23 of $15 billion (£10.8 billion) or about 25% of market cap.

10 best FTSE 100 performers in 2021

Company  % gain
Ashtead Group (LSE:AHT) 71.8
Meggitt (LSE:MGGT) 57.1
Glencore (LSE:GLEN) 54.9
Croda International (LSE:CRDA) 51.6
Royal Mail (LSE:RMG) 49.1
Dechra Pharmaceuticals (LSE:DPH) 47.5
Segro (LSE:SGRO) 46.6
Ferguson (LSE:FERG) 43.1
Sage (LSE:SGE) 41.4
St James's Place (LSE:STJ) 41.1

Source: Sharepad as at 20 December 2021. 

With a projected dividend yield of around 4.5%, investors have seen the dual benefit of share price appreciation while being handsomely paid to wait as the group’s transformation unfolds. Shareholder returns also boosted Royal Mail as the tailwinds from the switch to online shopping increasingly look like they are here to stay. Strong cash flows have enabled the payment of a special dividend as well as a share buyback programme which total £400 million.

Ashtead's dividends have grown consecutively for the past 15 years, with the most recent interim award due for payment on 22 February being 28% higher than a year earlier. That followed a record half-year performance as the rebounding US economy and Joe Biden's infrastructure spending plans boosted demand at Sunbelt operations.

The company now generates about 80% of its revenues from the US, where it is the second-largest equipment rental company. It has a further 186 stores and 3,810 employees in the UK, where trading has been boosted by pandemic-related work for the NHS.

Croda's markets extend from the fragrances used in perfumes to the additives and materials helping industrial customers to transition to new sustainability-driven solutions.

In the past year, it has also been boosted by its role in the Pfizer-BioNTech vaccine, a development described by chief executive Steve Foots as his proudest moment in 30 years with the East Yorkshire-based company.

Croda said the vaccine signalled the potential for further growth well beyond Covid-19 in terms of the prevention of other infectious diseases or for treatments including cancer.

Its half-year results showed a 50% rise in adjusted profits to £229.5 million, leading to a 10% higher dividend at 43.5p and continuing an unbroken trend of increasing returns over nearly 30 years.

Other big risers included Dechra Pharmaceuticals (LSE:DPH), with the veterinary and animal health products business a continued beneficiary of the surge in pet spending during lockdowns. With shares up 47.5% in the year-to-date, the strong performance recently secured the North West-based company a place in the FTSE 100 index for the first time.

The warehouse and industrial property firm Segro (LSE:SGRO) has also benefited from favourable trends as e-commerce and urbanisation continue to underpin occupier demand. Shares have risen 47% to 1,385p, which is well above the half-year net asset value of 909p.

The performance of accounting software group Sage (LSE:SGE) has also impressed after chief executive Steve Hare told investors recently he is now firmly focused on growing the business both organically and through acquisitions.

His declaration follows three years of restructuring and investment where the SME accountancy and payroll specialist has been positioning itself for faster customer acquisition. Shares are up more than 40% over the year.

10 worst FTSE 100 performers in 2021     

Company  % loss
Flutter Entertainment (LSE:FLTR) -27.1
Melrose Industries (LSE:MRO) -26.8
Ocado Group (LSE:OCDO -26.5
London Stock Exchange Group (LSE:LSEG) -25.1
Polymetal International (LSE:POLY) -23.8
Fresnillo (LSE:FRES) -21.6
Smith & Nephew (LSE:SN.) -19.7
abrdn (LSE:ABDN) -19.4
IAG (LSE:IAG) -18.1
Associated British Foods (LSE:ABF) -15.5
Source: Sharepad as at 20 December 2021. 

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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