Are these the top stocks to watch in 2026?

UK investors tend to turn to the FTSE 100 for the relative safety provided by the dividend stocks — while the index typically pays out circa 4% per annum, there are many popular choices which have been sustainably paying out more than this over many years.

While past performance is not an indicator of future returns, but the common trope is that investors in FTSE 100 dividend shares are eschewing the increased capital gains on offer elsewhere — for example, the S&P 500 — in return for reduced risk.

However, several FTSE 100 companies have delivered extraordinary returns in 2025, and while there is an element of subjectivity to ‘top stocks’ to watch in 2026, the following five could be on investor radars.

Top stocks to watch

M&G

M&G screens as one of the cheapest stocks in the UK market on a growth-adjusted basis, reflecting deep scepticism around the outlook for asset managers. The group has been hit by persistent net outflows, fee pressure, and weak sentiment towards active management, particularly in fixed income and multi-asset funds. That said, profitability remains resilient, capital generation is solid, and the balance sheet is strong enough to support an attractive dividend. Any stabilisation in flows, improvement in markets, or clearer evidence that cost controls are working could drive a meaningful re-rating from depressed levels.

M&G weekly candlestick chart

Endeavour Mining

Endeavour Mining offers leveraged exposure to gold prices, with its valuation implying limited confidence in the durability of growth. The company operates large-scale assets in West Africa and benefits directly from record gold prices, which are supporting cash flow and balance sheet strength. Ongoing concerns around political risk, operational execution, and jurisdictional exposure continue to cap sentiment. However, capital discipline has improved and shareholder returns have increased. If gold prices remain elevated and production guidance holds, the valuation suggests scope for upside despite the well-flagged regional risks.

Endeavour Mining weekly candlestick chart

Entain

Entain low growth-adjusted valuation reflects regulatory uncertainty, leadership changes, and slower momentum in some core markets. Heavy investment in BetMGM has weighed on near-term margins and cash flow, while regulatory tightening across Europe has limited earnings visibility. Offsetting this, the UK and European operations remain strongly cash generative and BetMGM is approaching a potential scale-driven inflection point. As investment intensity eases and cost pressures moderate, earnings growth could re-accelerate. The current valuation suggests the market remains cautious on execution and regulation, leaving room for upside if delivery improves. 

Entain weekly candlestick chart

United Utilities Group 

United Utilities Group trades at a subdued valuation despite its defensive earnings profile, reflecting sector-wide pressure from regulatory scrutiny, political noise, and higher interest rates. Investor concerns centre on leverage, future price settlements, and dividend sustainability. However, cash flows are stable, revenues are largely inflation-linked, and earnings visibility is high relative to most UK equities. The company’s long-term capital investment programme supports steady growth and network resilience. If bond yields ease or regulatory risks diminish, sentiment towards the shares could improve, given how much caution already appears priced in.

United Utilities Group weekly candlestick chart

Fresnillo 

Fresnillo provides direct exposure to silver and gold prices and has benefited from the recent surge in precious metals. The valuation still reflects operational volatility, cost pressures, and concerns over declining ore grades at some mines. However, higher metal prices materially improve margins and cash generation, particularly given Fresnillo’s sensitivity to silver. With geopolitical risks rising and investors rotating towards hard assets, earnings momentum looks supportive. If operational delivery stabilises alongside sustained strength in metals prices, the shares have scope to outperform despite lingering execution risks.

Fresnillo weekly candlestick chart

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Top stocks to watch in 2026 summed up

M&G, Endeavour Mining, Entain, United Utilities Group and Fresnillo could be some of the best shares to buy in 2026. These FTSE 100 companies performed well throughout 2025 and have the highest PEG ratio on the index. If this performance continues into 2026, further gains are possible.

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