1.Sage Group
SGPYY (OTC)
Sage Group specializes in delivering cloud software and AI solutions tailored for small to medium-sized enterprises, offering essential business management tools like accounting and payroll. With a dividend yield of nearly 1.89%, the company has demonstrated solid long-term performance, boasting a 62.63% return over the past five years, despite experiencing a 16% decline in the last year. Recently upgraded by Citigroup to a Buy rating, Sage Group is viewed favorably for its potential in the growing tech sector.
Pros:
- Strong growth in cloud software and AI
- Diverse product offerings for SMEs
Cons:
- Negative returns over the past year
- Market volatility risk
2.RELX
RLXXF (OTC)
RELX stands out as a data analytics powerhouse, leveraging recurring subscription revenues while investing heavily in AI and automation. Although it faced a 22.22% decline over the past year, its five-year return of 48.01% illustrates its potential for growth. With a dividend yield of 1.79% and a substantial £1.5 billion share buyback strategy, it's an appealing choice for investors seeking both stability and expansion.
Pros:
- Recurring subscription revenues
- Aggressive AI and automation investments
Cons:
- Negative returns over the past year
- Market volatility risk
3.Wise
WPLCF (OTC)
Wise is a fintech money transfer platform that has gained traction with over 15.5 million users worldwide. Analysts project a significant growth potential of 60%, supported by a median 12-month price target of $12.00, reflecting a positive outlook despite a modest 1-year return of 3.61% and a slight 5-year decline of -0.44%.
Pros:
- Strong growth potential forecasted
- Wide user base of over 15.5 million
Cons:
- Negative returns over the past 6 months
- Market volatility risk
4.NatWest
RYS1.DE (XETRA)
NatWest presents an appealing opportunity for investors, trading at 0.8 times its price-to-net asset value and boasting a strong anticipated return on equity exceeding 10%. With a remarkable 18.5% increase in share price over the past year and a solid dividend payout, this UK bank remains a viable option despite recent performance highs. Analysts have given it a solid B+ rating, indicating confidence in its growth potential and value.
Pros:
- Anticipated return on equity above 10%
- Increased dividend payouts
Cons:
- Share price decline over the past 12 months
- Market volatility risk
5.Lloyds
LLOY.SW (SIX)
Lloyds, a UK-focused bank unencumbered by government ownership, presents a compelling investment opportunity despite an 8.8% decline in share price over the past year. Analysts have rated it highly, reflecting confidence in its stability and growth potential. With a forward earnings multiple of 13.3 for FY2025, dropping to 10.3 for FY2026, investors may find attractive entry points as the bank continues to recover from previous lows.
Pros:
- Clear investment proposition
- Strong earnings growth forecast
Cons:
- Share price decline over the past year
- Market volatility risk
Final Words
As you consider the best bank stocks this January 2026 in the UK, keep in mind the potential of established players like NatWest. Take time to compare your options and conduct thorough research to make informed investment decisions that align with your financial goals.
Frequently Asked Questions
NatWest has shown strong performance, rebounding from 2023 lows to reach 15-year highs, making it an attractive investment option. Its anticipated return on equity exceeds 10% and it has achieved 18.5% share price growth over the past 12 months.
The ticker symbol for NatWest is RYS1.DE. It is traded on the XETRA market.
NatWest has increased its dividend payouts, although specific dividend yield figures are not provided in the research. This increase is part of its broader strategy to enhance shareholder value.
While NatWest has rebounded strongly, potential risks may include market volatility and economic conditions affecting the banking sector. It's essential to evaluate these factors before making an investment decision.
NatWest's performance, including a market cap of $31.01B and a beta of 0.92, suggests it may be less volatile than some peers. However, comparing specific metrics like P/E ratios and growth rates with other bank stocks can provide deeper insights.
NatWest's strong stock performance is primarily driven by a successful restructuring, positive earnings surprises, and the government's continued exit from its majority stake in the company.
