Over the past 12 months, Royal Mail’s stock has outperformed almost all of the S&P 500’s companies except two, according to eToro data.
Royal Mail (RMG), the best performing stock in the UK
Royal Mail is Britain’s largest postal company. Founded in 1516, it was privatized in 2011, and has been listed on the London Stock Exchange since 2013.
Over the past 12 months, RMG has returned almost 189%, far outperforming some of the most popular stocks included in the S&P 500 index, such as Alphabet/Google (+82%), Microsoft (+41%), Apple (+28%) and Netflix (+14%).
It was also the best-performing large-cap stock in the UK.
RMG had lost a lot of ground in the past. In fact, after debuting in 2013 at £450, and reaching an all-time high in 2018 at over £630, the price had plummeted to £118 in March 2020, before recovering very quickly enough to get back above £600 in June this year. Now the asset is just under £500, which is not much higher than it was initially in 2013.
Other well-known UK companies, such as Ladbrokes, Entain and NatWest, have also outperformed the average US large-cap stocks, yet according to an eToro survey, only 14% of retail investors believe that the UK represents the best buying opportunity for the rest of 2021. It is also worth mentioning that after the Brexit referendum in 2016, shares in UK companies have been relatively unpopular.
eToro and the Anglo-American 50 Index
eToro has created a dummy index, called the eToro Anglo-American 50, which combines the top 45 performers in the S&P 500 and the top five in the FTSE 100. Royal Mail is in third place overall for performance among the stocks included in this index, with Entain in 15th place achieving an excellent +141%.
Global Markets Strategist at eToro, Ben Laidler, said:
“The FTSE 100 has lagged its major international peers ever since the Brexit vote in 2016. However, despite being generally unloved by investors, our research shows that UK firms can offer returns equal to – and better than – even the fast-growing firms in the US and other high-growth markets.
If investors should take anything away from our research it’s that they should not take a general, broad-brush approach to stock-picking. Discounting a firm just because it’s headquartered in the UK – or any other market currently perceived as slow growing – increases the chance that you’ll miss out on companies offering the best returns.
Instead, it’s always the best approach to consider each and every firm on their own merits, before deciding whether or not they offer long-term growth potential”.