12 Stocks of Christmas: Relx

Relx (LON:REL) is always one of the top performers in the FTSE 100. Its shares are up 17% in 2024 and it’s currently the sixth biggest company in the UK.

But despite being a consistently high performer which rarely lets down its shareholders and pays a healthy dividend along the way, it’s often hard to justify an entry point.

At the time of writing shares are trading on 28 times forecast earnings, which is towards the top end of the recent range, but Relx PE ratio rarely falls below 25x. The free cash flow yield of just over 3% is perhaps slightly more appealing from a valuation perspective, but only just. Relx is definitely not a value stock.

But I am not a value investor. I look for stocks that can provide long term compounding returns and in that respect, Relx definitely ticks a lot of boxes.

The company generates sales from four distinct divisions which all have very sticky customers. In scientific and legal, the company boasts a number of key brands for academic and legal professions. And in risk (the largest and fastest growing business division), customers include many governments and...