As of 5 December 2025, UK equities are quietly having one of their best years in over a decade. The FTSE 100 is up around 22–23% year-to-date (including dividends) and sits less than 2% below its record closing high, according to analysis from AJ Bell and Investing.com. [1]
Today, the FTSE 100 is up about 0.2% and the FTSE 250 about 0.4%, with AstraZeneca, Ocado, Watches of Switzerland and Greggs among the day’s notable risers, while energy majors BP and Shell drag on the index. [2]At the same time, markets are betting that the Bank of England will cut Bank Rate from 4% to 3.75% on 18 December, with economists expecting at least one more cut in early 2026. [3]
Against this backdrop, investors are asking a familiar question: what are the best UK stocks to buy now? Below, we pull together fresh research, forecasts and stock ideas published around 5 December 2025 from sources including Reuters, Investing.com, Morningstar and MoneyWeek, and highlight 10 UK shares that look particularly interesting for further research today.
Important: Nothing here is personal investment advice. It’s informational, based on public sources as of 5 December 2025. Always do your own research and consider speaking to a regulated financial adviser before investing.
UK stock market today: why sentiment is turning more positive
Several themes are shaping UK equities right now:
- Indexes near records: The FTSE 100 has delivered a 22.8% total return in 2025 so far, its best year since the financial crisis, driven by mining, financials and defence stocks. [4]
- Rate‑cut hopes: The Bank of England has already cut Bank Rate down to 4%, and its own explainer notes that inflation has fallen sharply from its peak. [5] A Reuters poll shows nearly 80% of economists expect a December cut to 3.75%, with markets pricing in more easing in early 2026. [6]
- FTSE 100 near record highs: A market recap this morning notes that the FTSE 100 is less than 2% below its record, up about 19% year-to-date on a price basis, with defence, mining and other global cyclicals leading the rally. TechStock²
- Sector rotations: On today’s tape, personal goods, chemicals and specialist retailers are among the strongest sectors, while oil & gas stocks fall with weaker crude prices. [7]
- Dividend strength: Morningstar’s latest screen of the 10 best‑performing UK dividend stocks shows strong recent gains in names like Games Workshop, SSE, British American Tobacco and AstraZeneca, with the Morningstar UK Dividend Yield Focus Index up nearly 20% over the past year. [8]
At the same time, UK equities still trade at a discount to global markets on many measures. J.P. Morgan notes that UK stocks have traded at a persistent valuation discount since the Brexit vote, and while recent M&A and buyback activity suggests those discounts may have gone “too far,” the market is still not expensive relative to peers. [9]
So we have a market that’s had a great run in 2025, but where selective opportunities remain, especially in:
- High‑quality global earners.
- Dividend payers with solid balance sheets.
- Mid‑caps and small caps that could benefit most from lower rates.
How this list of “best UK stocks to buy now” was built
To keep this grounded in current, 5 December 2025 information, the list below leans heavily on:
- Today’s UK market coverage – e.g. Reuters’ midday report on FTSE 100 movers and sector trends. [10]
- December 2025 stock‑pick lists – such as Investing.com’s “Best UK Stocks To Buy in December 2025”, which screens for attractive valuations and strong balance sheets. [11]
- Fresh dividend and performance screens – Morningstar’s “10 Best‑Performing UK Dividend Stocks” for November. [12]
- Year‑to‑date leaderboard data – MoneyWeek’s rundown of 2025’s best and worst FTSE 100 performers. [13]
- Recent single‑stock research from outlets like The Motley Fool UK and Yahoo Finance, particularly around names like Diageo and Rolls‑Royce. [14]
From there, the emphasis is on quality, balance sheets, cashflow and realistic valuations rather than pure momentum.
Snapshot: 10 UK stocks to research now
Here’s a quick overview before we dive into each name:
- AstraZeneca (AZN) – Defensive growth giant & UK’s largest listed company.
- GSK plc (GSK) – Big pharma with a lower valuation and attractive dividend.
- SSE plc (SSE) – Regulated utility + energy transition play at a discount to fair value.
- British American Tobacco (BATS) – High‑yield “wide moat” dividend stock (with clear ESG risks).
- Games Workshop (GAW) – Niche IP powerhouse combining growth with dividends.
- Herald Investment Trust (HRI) – Small‑cap tech & media fund for higher‑risk growth.
- MONY Group (MONY) – Online comparison platform with income and growth.
- Associated British Foods (ABF) – Primark + defensive food brands in one package.
- Computacenter (CCC) – Solid IT infrastructure provider with secular tailwinds.
- Diageo (DGE) – Bruised consumer‑staples blue chip now trading well below its historical valuation.
Let’s go through them one by one.
1. AstraZeneca (AZN): defensive growth at the top of the FTSE
Why it’s on the radar today
- On 11 November 2025, AstraZeneca hit a record high, cementing its position as Britain’s largest listed company, after beating earnings expectations and easing US drug‑pricing fears. [15]
- Morningstar’s dividend screen shows AstraZeneca’s share price up ~34% over the past year, with a 1.75% forward dividend yield, and labels it a “wide moat” stock (sustainable competitive advantage). [16]
- In today’s trading, AstraZeneca is up again, breaking a six‑day losing streak and helping nudge the FTSE 100 higher. [17]
Investment case (medium risk, quality growth)
AstraZeneca offers:
- A deep pipeline in oncology, cardiovascular and rare diseases, with recurring catalysts from trial data and approvals.
- A global revenue base – particularly strong exposure to the US – providing diversification against UK‑specific risks. [18]
- A small but growing dividend that historically has been reliable rather than high‑yielding.
The main caveat is valuation. Morningstar notes that AZN recently traded at about a 13% premium to its fair value estimate, reflecting investors’ willingness to pay up for quality. [19] For long‑term investors comfortable with paying for growth, it remains one of the strongest UK “core holdings” – but it’s not a bargain‑bin pick.
2. GSK plc (GSK): income + value in big pharma
Investing.com’s December list places GSK as one of its five “Best UK Stocks To Buy” right now, highlighting a mix of value and resilience: [20]
- Market cap: ~£72.9bn
- P/E ratio: about 13.4x, notably lower than many global pharma peers.
- Dividend yield: around 3.5%, with a long history of shareholder payouts.
- Implied upside: InvestingPro’s fair value model suggests ~27% potential upside from current levels.
ValueWalk also includes GSK in its shortlist of top UK stocks to buy in December 2025, underscoring that it features on multiple independent “buy” lists. [21]
Why investors like it
- A more focused portfolio after the consumer health spin‑off, clearer emphasis on vaccines and specialty medicines.
- A solid balance sheet and ongoing pipeline progress in areas like HIV and oncology. [22]
- A valuation that prices in many past missteps, giving some margin of safety if execution improves.
For investors who want blue‑chip healthcare exposure with a higher yield than AstraZeneca and more obvious value credentials, GSK is a natural candidate for further research.
3. SSE plc (SSE): rate‑sensitive utility with energy transition upside
From Morningstar’s “10 Best‑Performing UK Dividend Stocks” report, SSE stands out as a steady compounder: [23]
- Share price up ~14.7% in November and ~27.7% over the past 12 months.
- Around £21.98 per share at the time of the report.
- Forward dividend yield: about 2.9%, with a long history of payouts.
- Trading at roughly a 10% discount to Morningstar’s fair value estimate of £24.30.
Why it fits a 2026‑oriented watchlist
- Regulated network assets and contracted renewable projects offer relatively predictable cashflows.
- Lower interest rates reduce the discount rate on long‑dated cashflows, often supportive for utilities.
- SSE is heavily involved in offshore wind and grid infrastructure, tying it to long‑term decarbonisation themes.
Risks include regulatory changes, project execution and the possibility that rates stay higher for longer than currently expected. But for investors seeking core UK income with some growth, SSE screens well on quality and valuation.
4. British American Tobacco (BATS): high yield with serious caveats
Also on Morningstar’s November top‑10 list is British American Tobacco: [24]
- Share price up 13%+ in November and nearly 56% over 12 months.
- Around £44 per share, with a forward yield of ~5.4%.
- Rated as having a “wide moat” due to strong brands and distribution.
- Currently trading a little above Morningstar’s fair value estimate (about a 7% premium).
Why income investors still look at it
- Cash‑rich tobacco operations support large, relatively predictable dividends.
- Heated tobacco and vaping offer some growth, even as traditional volumes decline.
But the risks are substantial:
- Structural volume decline as smoking rates fall.
- Regulatory pressure (plain packaging, flavour bans, higher excise taxes).
- ESG screens that exclude tobacco entirely for many institutions.
If you’re comfortable with the ethical and regulatory backdrop and mainly want high current income, BATS is still one of the highest‑yielding blue chips in the FTSE. For many investors, however, the non‑financial risks will be a deal‑breaker.
5. Games Workshop (GAW): niche IP + growing dividends
Games Workshop, the owner of Warhammer, appears at the top of Morningstar’s dividend winners list: [25]
- Share price up ~21.9% in November and ~41% over 12 months.
- Around £194 per share with a forward yield of ~1.7% and £3.25 trailing 12‑month dividend per share.
- Rated 2 stars, meaning Morningstar views it as somewhat expensive relative to fair value.
Why it keeps showing up in “quality UK stock” lists
- Unique IP and a passionate global fanbase, which makes revenues sticky and pricing power strong.
- A high‑margin business model with growing royalties from media and licensing deals.
- Management has a track record of sharing surplus cash via special dividends.
Given the recent run‑up, the main question is valuation. It may not be a classic “value” play today, but for investors willing to pay for quality, GAW remains one of the most distinctive UK growth stories.
6. Herald Investment Trust (HRI): a basket of UK small‑cap tech
Investing.com’s December 2025 “Best UK Stocks” list puts Herald Investment Trust at the very top: [26]
- Focus: small‑cap technology, media and telecoms (TMT) stocks, mainly in the UK.
- Market cap: ~£1.13bn.
- P/E: about 36x, reflecting growth expectations.
- Dividend: none – this is a capital‑growth vehicle.
- Valuation: InvestingPro models suggest ~32% upside from current levels to fair value.
Why it’s interesting now
- UK small caps have lagged larger peers for several years; there’s evidence that earnings have bottomed, and some strategists argue that UK mid‑ and small‑caps could outperform if rate cuts feed through to domestic growth. [27]
- HRI offers diversified exposure to this theme without having to pick individual small‑cap winners.
This is higher risk – small‑caps can be volatile, and a trust structure adds a layer of discount/premium dynamics. But for investors willing to take on volatility in exchange for growth potential, HRI is a focused way to back a UK tech & innovation recovery.
7. MONY Group (MONY): digital comparison with a near‑5% yield
MONY Group, owner of price comparison and lead‑generation platforms, is another of Investing.com’s five top UK picks for December: [28]
Key stats from that analysis:
- Market cap: ~£978m.
- P/E: about 11.9x – modest for a digital platform with earnings growth.
- Dividend yield: around 4.9%.
- Implied upside: roughly 48% to InvestingPro’s fair value of £2.78.
Why it fits current themes
- As consumer confidence gradually stabilises and rate cuts ease the squeeze on household budgets, price comparison sites can see stronger traffic and conversion.
- MONY’s combination of cash generation + high yield + growth optionality is relatively rare on the London market.
The main risks are competition, regulatory changes in how financial products are sold online, and cyclicality in advertising and lead‑generation spending. But among medium‑cap UK “income + growth” plays, MONY stands out as one of the more attractively valued names right now.
8. Associated British Foods (ABF): Primark plus defensive food brands
Investing.com’s list also highlights Associated British Foods (ABF) as a top December pick: [29]
- Market cap: ~£15.1bn.
- P/E: about 14.9x – reasonable given its mix of retail and food operations.
- Dividend yield: c. 3%.
- Implied upside: roughly 22% to a fair value estimate of £26.08.
ABF gives you:
- Primark, a major value‑fashion retailer with strong UK and European presence, benefitting when consumers trade down but still want discretionary spend.
- A diversified set of food, ingredients and agriculture businesses, which often behave more defensively through the cycle.
The business has kept debt modest, providing resilience in a higher‑rate world. [30] With UK wage growth cooling and inflation easing, Primark’s positioning at the value end of the market could remain attractive into 2026.
9. Computacenter (CCC): steady IT infrastructure play
Rounding out Investing.com’s December five‑stock list is Computacenter, a stalwart IT infrastructure and services provider: [31]
- Market cap: ~£3.1bn (FTSE 250).
- P/E: about 19.3x – not a screaming bargain, but in line with steady growth.
- Dividend yield: roughly 2.4%.
- Implied upside: around 24% in InvestingPro’s fair value model.
- Volatility: a beta of ~1.1 – a touch more volatile than the market, but not dramatically so.
Why it works in this macro environment
- Companies and public‑sector bodies continue to upgrade infrastructure, cloud and security, regardless of short‑term GDP noise.
- As rates fall and capex budgets loosen, IT services spending tends to re‑accelerate.
- A solid balance sheet gives Computacenter the flexibility to pursue growth without over‑levering. [32]
For investors wanting tech exposure without speculative valuations, CCC is a pragmatic choice.
10. Diageo (DGE): high‑quality brands, lowly valued share price
In many ways, Diageo is the mirror image of 2025’s winners. MoneyWeek lists it among the worst FTSE 100 performers this year, with a ~28% negative total return, blaming Trump‑era tariffs and shifting consumer tastes. [33] The stock has also more than halved over three years, according to The Motley Fool. [34]
Recent snapshots show:
- Diageo trading around £17 per share in late November, on a forward P/E of about 13.1x, which is well below its 10‑year average near 21–29x. [35]
- MarketWatch notes the stock is currently over 30% below its 52‑week high of ~£26.20 reached last December. [36]
- Management’s latest results commentary points to a return to low single‑digit organic net sales growth in fiscal 2025, after a tough period driven by Latin American destocking and FX headwinds. [37]
A recent article titled “4 reasons why the Diageo share price could surge 31% to £22.25” argues that the slump has gone too far, citing valuation and long‑term brand strength as key supports. [38]
The bull thesis in a sentence: You’re getting a portfolio of globally recognised brands (Guinness, Johnnie Walker, etc.) at a multiple more commonly associated with cyclical industrials, not luxury spirits.
The bear thesis: The share price may stay depressed if:
- Premium spirits demand stays weak in key regions.
- Further tariffs or taxes hit margins.
- Competition in low‑/no‑alcohol and value segments erodes pricing power.
For long‑term, contrarian investors comfortable with consumer‑staples risk, Diageo is arguably one of the most interesting “quality at a discount” opportunities in the FTSE 100 right now – but patience may be required.
Other UK stocks to keep on your watchlist
Beyond the 10 names above, several stocks frequently appear in late‑2025 “best UK stocks” discussions:
- Rolls‑Royce Holdings (RR.) – one of 2025’s top FTSE 100 performers with gains of around 80%+ this year, driven by defence and civil aerospace strength. [39]
- Lloyds, Barclays, Standard Chartered and Prudential – banks and insurers that feature prominently among 2025’s best performers, and could continue to benefit if UK and global growth hold up as rates fall. [40]
- Airtel Africa, Endeavour Mining and Fresnillo – high‑beta winners tied to emerging markets and commodities, highlighted both by Morningstar’s dividend list and MoneyWeek’s performance tables. [41]
These might not all be “buys” at today’s prices – some look richly valued after huge runs – but they’re important bellwethers for where international investors are currently finding opportunity in UK markets.
How to use this list
A few practical ways to turn this into an actionable process:
- Segment by role in your portfolio
- Core defensives: AstraZeneca, GSK, ABF.
- Income plays: SSE, BATS, MONY, some banks.
- Growth & recovery: Games Workshop, HRI, CCC, Diageo.
- Check valuations & fundamentals in your broker / data platform
- Confirm current P/E, yield, and debt levels, as these move quickly.
- Compare with the fair‑value and upside figures cited above from InvestingPro and Morningstar. [42]
- Stress‑test your scenario
- Ask: what if rate cuts are slower than markets expect?
- What if commodity prices fall sharply, or growth slows more than forecast?
- Which holdings would you be comfortable owning through a 2026 recession?
- Diversify across sectors and styles
- The UK market can be lumpy. Spreading exposure across healthcare, consumer staples, financials, utilities, tech and cyclicals can help manage risk.
Final word
On 5 December 2025, the UK stock market is in far better health than its reputation suggests: the FTSE 100 is close to a record year, dividends remain robust, and rate‑cut hopes are supporting valuations. At the same time, laggards like Diageo show that even high‑quality franchises can end up deeply out of favour.
The 10 stocks above aren’t guaranteed winners, but they capture many of the key themes driving the UK market today: quality global earners, solid dividends, and selectively cheap growth.
Use them as a research shortlist, not a shopping list – and make sure any investment fits your own goals, time horizon and risk tolerance.
References
1. moneyweek.com, 2. www.reuters.com, 3. www.bankofengland.co.uk, 4. moneyweek.com, 5. www.bankofengland.co.uk, 6. www.reuters.com, 7. www.reuters.com, 8. lt.morningstar.com, 9. am.jpmorgan.com, 10. www.reuters.com, 11. uk.investing.com, 12. lt.morningstar.com, 13. moneyweek.com, 14. www.fool.co.uk, 15. www.reuters.com, 16. lt.morningstar.com, 17. www.reuters.com, 18. www.reuters.com, 19. lt.morningstar.com, 20. uk.investing.com, 21. www.valuewalk.com, 22. uk.investing.com, 23. lt.morningstar.com, 24. lt.morningstar.com, 25. lt.morningstar.com, 26. uk.investing.com, 27. am.jpmorgan.com, 28. uk.investing.com, 29. uk.investing.com, 30. uk.investing.com, 31. uk.investing.com, 32. uk.investing.com, 33. moneyweek.com, 34. www.fool.co.uk, 35. uk.finance.yahoo.com, 36. www.marketwatch.com, 37. www.diageo.com, 38. www.fool.co.uk, 39. moneyweek.com, 40. moneyweek.com, 41. lt.morningstar.com, 42. uk.investing.com
