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RELX (LSE: REL) has long been a growth share I’ve admired from a distance.
I’ve kept close tabs on the FTSE 100 information and events specialist business for years, but never hit the Buy button.
I tend to buy shares that are out of favour, hoping to pick up quality at a discount and benefit from both a higher yield and long-term recovery.
It’s a sound approach, but sticking with it isn’t always easy when a momentum play like RELX just keeps soaring.
It keeps climbing
Over the past 12 months the RELX share price has jumped 25%. Over five years it’s up a bumper 130%. While it briefly dipped due to Donald Trump’s tariff trades, the setback was short-lived. Now it’s rising again.
RELX is now a £75bn heavyweight, with operations in more than 180 countries. Full-year 2024 results published in February showed a 10% rise in adjusted operating profit to £3.2bn on revenues of £9.43bn.
Margins ticked higher to 33.9%, thanks to process improvements and tighter cost controls.
The fun has continued in 2025, with the latest trading update, published on 24 April, showing a “strong” start with growth across all four divisions, including risk, which makes up over a third of sales.
Here, financial crime compliance and digital identity helped to drive strong revenue gains. Its scientific and medical arm also reported solid progress.
Of course, risks remain. A global economic slowdown could dent RELX’s events business, and tariffs may still cause disruption, particularly on data-related services. Currency swings and tech-related spending cuts could also hit profits.
Payouts are picking up
The shares go ex-dividend on 8 May. That could tempt investors keen to bank the next payout, though it’s important to remember that share prices typically dip to reflect the dividend as it’s paid out. The forecast dividend impact here is 1.09%.
The trailing yield sits at just 1.53%, but that reflects the surging share price more than anything else. Underlying policy is progressive. The 2024 total dividend of 63p was increased a robust 7% on 2023.
The board also served up a meaty £1bn of share buybacks and has approved a further £1.5bn for 2025. With net debt of £6.56bn, the balance sheet looks comfortable.
Valuation looks high
Momentum doesn’t come cheap. RELX shares trade on a price-to-earnings ratio north of 30. That’s pricey compared to most of the FTSE 100, but it’s been pricey for years and still kept growing. Of the 15 analysts tracking the stock, nine call it a Strong Buy and none rate it a Sell.
However, there’s a risk to all of this. If revenues and profits falls short of high investor expectations, market punishment could be swift.
The 13 analysts offering price targets have a median estimate of 4,473p. That suggests a potential gain of 8.4% from today, and with dividends factored in, a possible total return of 10%.
Forecasts are far from foolproof, especially today, but I take this as a sign that the rally might cool a little from here.
Even so, I still believe RELX is one of the most compelling growth stories on the FTSE 100. Investors may want to consider buying before it goes ex-dividend. Or after. But in my view they should seriously consider buying it.
