Down 18%! Is this beaten down dividend growth hero now the best share to buy in December?
When looking for the best share to buy at the start of a new month, I start by checking how FTSE 100 stocks performed over the previous one.
Typically, Iâm looking for a solid company thatâs had a rough time and is trading at a lower valuation as a result. Although the FTSE 100 ended November slightly up, plenty of stocks fell by double digits. One jumps out. Iâve been keen on it for years, but it was always too expensive. It’s cheaper now though. Time to consider buying it?
An appealing stock
The company is information and analytics firm RELX (LSE: REL). Itâs hardly a household name, yet itâs been one of the best-performing stocks over the last decade, delivering a mix of dividend income and share price growth.
Banks use its data to fight money laundering, insurers rely on it for risk assessment and pricing, and pharmaceutical companies depend on its research intelligence. That gives the company high-quality recurring subscription revenues and a dominant market position.
The shares wobbled a couple of years ago as investors fretted that artificial intelligence might let customers do the work themselves. Then they decided that AI could help RELX deliver the same services more efficiently. Like everything to do with AI, the jury is still out.
Back in November 2024, I considered buying but was wary of the valuation, with a price-to-earnings (P/E) ratio of nearly 30. Expectations were high. For a while, RELX carried on climbing as usual. But the shares dropped 13% in November and are now down 18% over 12 months.
Long-term investors wonât be too concerned. The RELX share price is still up 75% over five years, with dividends on top. The last update, on 23 October, showed strong trading momentum for the first nine months of 2025, with underlying revenue up 7%, driven by analytics and decision tools. The board reaffirmed full-year guidance, highlighting growth in revenues and adjusted operating profits, along with accelerating adoption of AI-powered tools.
Lower price-to-earnings ratio
So why the dip? Itâs hard to pinpoint. Some investors are worried about AI, others about high expectations. Whatever the reason, the P/E has slipped to 25. Cheaper, but not dirt cheap.
RELX has a modest trailing yield of 2.1%, but it has raised dividends every year this century, with a compound annual growth rate of 9.3% over the last decade. The low yield reflects strong share price growth.
I think the long-term outlook remains solid, though nothing is guaranteed. It may not be a household name but with a £55bn market cap, itâs the 13th largest UK stock. So it’s unlikely to repeat stellar historic growth rates. AI is still a worry, while be struggling global economy could hit demand for its services, as customers look to cut costs.
But here’s something really exciting. Consensus analyst forecasts produce a 12-month median RELX share price target of 4,354p. If correct, that’s an increase of almost 44% from today. Many of these predictions will have been made before the recent dip, but I’m still excited. I think RELX looks well worth considering at today’s price. It may not be the very best FTSE 100 share to buy today, but it comes pretty close.
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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended RELX. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
