But if I invested £20,000 today, how much passive income would I actually be earning by July 2027? Let’s crunch the numbers.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

What a FTSE 100 tracker could deliver

The FTSE 100 currently yields around 3%. With total UK dividends forecast to grow by 5.3% this year, that yield nudges up to roughly 3.16% on a forward basis.

Pair that with the 10% price growth that institutional analysts are projecting, and a £20,000 investment today could grow into roughly £22,000 by next July, generating a £695.20 passive income. Not bad for doing almost nothing.

But stock-pickers could potentially do considerably better… and right now, one opportunity in particular has caught my attention.

Why RELX stands out

RELX (LSE:REL) is a global provider of information-based analytics and decision tools, serving customers across legal, scientific, risk, and exhibitions markets in over 180 countries through brands including LexisNexis, Elsevier, and Reed Exhibitions.

Earlier this year, the stock was brutally sold off. In February, shares plunged 14% in a single session after Anthropic launched a new AI legal tool, sparking fears that LexisNexis could be disrupted overnight. And at its lowest point, RELX had fallen over 45% from its 2025 peak!

But the experts don’t seem convinced by the panic…

With an average 12-month share price target of 3,140p, RELX shares could jump 35% by this time next year. Throw in a forward dividend yield of 3.11%, and a £20,000 initial investment could transform into £27,000, generating around £839.70 in passive income all by July 2027.

A stellar opportunity or a trap?

In its latest trading update, RELX reported a strong start to 2026 across all four divisions. Its legal research platform, Lexis+ with Protégé, is posting double-digit growth driven by AI-powered analytics. Its Financial Crime Compliance and digital Fraud & Identity tools are growing rapidly in Business Services. And Scientific, Technical & Medical is benefiting from record article submission volumes.

In short, the numbers suggest that RELX isn’t being disrupted by AI, but using it to strengthen its competitive moat.

Having said that, it would be naive to dismiss the risk entirely. Only 12% of RELX’s operating profit comes from the legal database business most exposed to AI competition. But that’s still significant. And if AI tools continue to advance rapidly, more of the group’s subscription cash flow and pricing power could be under threat.

After all, for a business that charges premium subscription prices for analytical tools, any sign that free or cheaper AI alternatives can replicate its value would be a serious long-term challenge.

Is it worth considering?

Right now, RELX is a rare combination. It’s a business actively embracing AI, benefiting from it, and yet simultaneously being viewed as a victim of it.

With the market pricing the company as if it’s already been disrupted, and the numbers saying quite the opposite, it’s hard not to be tempted. That’s why I think ISA investors looking to earn chunkier passive income over the next 12 months might want to take a closer look.

Should you invest £5,000 in RELX right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if RELX made the list?

Zaven Boyrazian does not hold any positions in the companies mentioned.

The post By July 2027, £20,000 in an ISA could generate a passive income of… appeared first on The Twelfth Magpie.

Here are three stocks that the pros think belong in every beginner portfolio right now.

Two powerful businesses with durable moats

AstraZeneca‘s (LSE:AZN) one of the world’s largest pharmaceutical companies, developing treatments across oncology, cardiovascular, and rare disease categories, with a pipeline that analysts at Bank of America (BofA) describe as ‘best in class‘.

The analyst team recently raised its price target from 14,500p to 16,500p, underpinned by multiple late-stage clinical trial catalysts expected to drive meaningful sales growth in the coming years. The bull case is straightforward: as a leading pharmaceutical giant with a deep pipeline, strong revenue visibility, and growing margins, AstraZeneca’s the kind of business that rewards patient long-term investors.

The risk, as with any pharma company, is clinical trial outcomes. A late-stage failure in a key programme can dent the share price sharply. And at a forward price-to-earnings (P/E) ratio of 17 times, the valuation already reflects a good deal of optimism.

RELX (LSE:REL) sits alongside AstraZeneca as another top pick from BofA for 2026. As a quick introduction, RELX is a global provider of information analytics, data, and decision tools serving professionals in legal, scientific, medical, and financial markets.

In the bank’s words, RELX is “a mis-priced AI beneficiary”.

Rather than being disrupted by AI, its LexisNexis and Elsevier divisions are actively embedding AI tools into their platforms, enhancing their value and deepening customer switching costs. And after a difficult 2025, the shares now trade at a meaningful discount to historical multiples, creating an attractive entry point.

The key risk is that the AI-driven sentiment recovery takes longer than expected. If customers perceive AI as a substitute for RELX’s tools rather than a complement, revenue growth could slow considerably.

A cash flow machine finding its stride

Rolls-Royce Holdings (LSE:RR.) completes the trio. The engineering giant powers wide-body aircraft through its civil aerospace division and supplies power systems to the defence sector – two markets with structural, long-term demand growth.

BofA believes Rolls-Royce is running well ahead of its own 2028 guidance targets and is projecting free cash flow of more than £5bn. And with capital returns expected to include at least £2.5bn in buybacks in 2026 alone, this is a business actively rewarding shareholders.

The risk for a beginner is volatility. Rolls-Royce has already risen sharply from lows and any disappointing update on engine flying hours or defence contracts could trigger a sharp pullback. But for investors with a long time horizon, dips in a business of this quality have historically proven to be buying opportunities.

The bottom line

All three of these FTSE shares combine strong competitive advantages, institutional conviction, and clear business momentum. But they’re not without risk. But for beginner investors looking to build a resilient long-term portfolio, these three blue-chips represent a genuinely compelling starting point.

So if I were starting a new portfolio today, these are definitely some of the companies I would first consider.

Should you invest £5,000 in AstraZeneca Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if AstraZeneca Plc made the list?

Zaven Boyrazian does not hold any positions in the companies mentioned.

The post The top 3 FTSE shares for beginner investors to consider buying in 2026 appeared first on The Twelfth Magpie.

But a growing number of investors are focusing on something different: building a second income.

The appeal is not necessarily about replacing a salary altogether. Instead, it’s about creating an additional source of cash that can supplement earnings and provide greater financial flexibility over time.

That raises an interesting question: could building a second income ultimately prove more valuable than chasing the next pay rise?

A second income doesn’t need to replace your salary

When people think about building a second income, they often imagine replacing their entire wage. That assumption can make the goal feel unrealistic.

The chart below tells a different story. Even replacing a relatively small proportion of earnings can create an additional stream of income that helps cover household bills, build savings, or provide a financial buffer during periods of uncertainty.

What stands out is how achievable the numbers appear. Replacing 10% of a £37,500 salary requires just over £300 a month. Doubling that to 20% requires around £625.

For many investors, that shifts the conversation. A second income does not need to be large enough to make work optional before it becomes valuable. Even a modest amount can increase financial flexibility and reduce the pressure that comes from relying entirely on a single source of earnings.

Chart generated by author

Compounding machine

RELX (LSE: REL) has long been viewed as one of the FTSE 100’s classic compounders. A steady business model, strong margins, and consistent earnings growth have helped build that reputation over time.

That’s reflected in the dividend profile. Rather than relying on a high starting yield, it has delivered steady dividend growth for years, supported by recurring revenue from subscriptions and data-driven services.

More recently, however, the share price has come under pressure as investors reassess the impact of artificial intelligence on its business model.

The concern is straightforward. If AI tools can increasingly summarise, search, and generate legal and scientific information, could they weaken pricing power or reduce the need for specialist data platforms?

At first glance, that looks like a credible risk. Law firms and corporate clients are already experimenting with AI tools that streamline parts of research and workflow processes.

But that argument tends to overlook how embedded RELX is in practice. Its customers typically use multiple systems at the same time, depending on jurisdiction, task, and regulatory need. In that environment, AI tools are more likely to sit alongside existing platforms rather than replace them.

The core value still comes from curated, verified, and continuously updated proprietary data. That isn’t easily replicated by general-purpose AI models, particularly in regulated industries.

For me, this looks less like a disruption story and more like a transition in how information is accessed rather than who owns it.

Bottom line

In that sense, RELX fits the idea of a second income stock quite well. It’s not about a high yield today, but about steady, compounding income growth over time.

On that basis, I think it remains one for long-term income investors to consider.

Should you invest £5,000 in RELX right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if RELX made the list?

Andrew Mackie owns shares in Relx.

The post Could a second income become more important than a pay rise? appeared first on The Twelfth Magpie.

The nature of today’s market

Today’s volatility is less about fundamental deterioration in businesses and more about speed. Investors are reacting to a constant stream of news flow, which encourages frequent trading rather than long-term thinking.

That can be dangerous for private investors. It’s certainly possible to make money by correctly calling short-term moves, but over time that approach is difficult to sustain and often leads to poor decision-making.

Instead, markets are increasingly being driven by sentiment shifts rather than any meaningful change in long-term value. The result is a pattern of overreaction followed by correction, as prices move ahead of — or fall behind — fundamentals.

In my view, this is increasingly becoming a stock picker’s market. Index-level returns are still heavily influenced by a small number of large companies. But beneath that headline performance sits a much wider spread of winners and losers driven by the specific strengths and weaknesses of individual businesses rather than the market as a whole.

For patient investors willing to ignore the daily noise and focus on business quality, that dispersion creates opportunity rather than confusion.

Volatile stock

RELX (LSE: REL) has earned a reputation as one of the FTSE 100’s premier long-term compounders, built on sticky customers, strong margins, and steady earnings growth. But after a sharp share price fall over the past year, investors are beginning to test that thesis.

At the heart of the debate is not short-term performance, but whether AI represents a structural threat to the business model. The concern is straightforward: if generative AI can search and summarise information, does that weaken the need for specialist data and analytics platforms?

That question has intensified as law firms and corporates begin experimenting with AI-enabled workflow tools such as Harvey and Legora. At first glance, it raises a simple concern — why pay for multiple systems if newer tools appear faster, cheaper, and more flexible?

Strong moat

To me, the market is still overpricing the disruption risk. RELX remains a high-quality FTSE 100 compounder, and I see recent weakness as a reaction to fear rather than fundamentals.

Large organisations do not run a single software ecosystem. They use dozens of tools across jurisdictions, tasks, and workflows. In that environment, AI is not replacing core research platforms, but being layered on top of them.

The key point is where value sits. The company’s moat remains anchored in curated, verified, and continuously updated legal, regulatory, and scientific data. AI can change how information is accessed, but it doesn’t easily replicate data ownership, trust frameworks, or compliance infrastructure.

A similar dynamic applies in risk and scientific information services, where a large share of revenue comes from machine-to-machine systems built on decades of proprietary data sets.

Too often the market throws out the baby with the bathwater. Trust remains at the centre of RELX’s business model, and that’s what underpins its customer relationships. On that basis, I recently added to my position during the recent share price weakness.

Should you invest £5,000 in RELX right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if RELX made the list?

Andrew Mackie owns shares in Relx.

The post FTSE 100 volatility: is the market ignoring a bigger shift beneath the headlines? appeared first on The Twelfth Magpie.

However, with the shares now down around 36% over the past year, investors are beginning to question whether that growth story is still fully intact.

AI threat to the growth narrative

For years, Relx (LSE: REL) has been viewed as a classic compounder, driven by sticky customers, high margins, and a strong position in data and analytics markets. However, that long-term growth narrative is now facing a new kind of test.

The concern in the market isn’t about short-term performance, but structural disruption. The rise of AI-enabled workflow tools has raised questions about whether large technology companies could begin to replicate or replace parts of the software and information services that have underpinned the business’s growth.

In particular, investors are asking whether generative AI could weaken pricing power, reduce switching costs, or allow customers to bypass specialist platforms altogether.

In other words, if AI can increasingly deliver research, analytics, and workflow functionality in a more automated way, does the traditional moat still hold?

That’s the debate now sitting at the centre of the investment case for Relx.

Durable moat

If AI can now summarise, search, and generate information, what exactly stops customers from switching away from RELX’s offerings?

On the surface, the threat sounds credible. Lawyers are increasingly experimenting with AI-enabled workflow tools such as Harvey and Legora. That naturally raises the question of why firms would pay for multiple overlapping systems when newer tools appear faster or cheaper.

But that framing misses how these platforms actually work in practice. Large law firms don’t operate a single digital ecosystem. They use dozens of different tools depending on jurisdiction, task, and client need. In that environment, AI tools aren’t replacing core legal research platforms — they sit alongside them, layered into existing workflows.

To me, the key point is where the real value sits. It remains anchored in curated, verified, and continuously updated legal and regulatory content.

AI may change how users access information, but it doesn’t easily replicate data ownership, trust frameworks, or the regulatory standards that underpin legal and compliance work.

A similar dynamic exists in risk and scientific information services. There, a large share of revenues comes from machine-to-machine systems built on decades of proprietary datasets and embedded regulatory infrastructure.

So this looks less like a clean disruption story and more like an integration cycle — where AI changes the workflow at the edges, but the core economic moat remains largely intact.

What’s the verdict?

To my mind, the market is overplaying the AI disruption risk here.

Much of RELX’s value still comes from highly curated, proprietary, and increasingly non-public data. Much of it is delivered through machine-to-machine systems that are extremely difficult to replicate.

Rather than being disrupted, I think the business is being misunderstood. On that basis, I recently added to my position on what I see as misplaced fear around the growth story.

Should you invest £5,000 in RELX right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if RELX made the list?

Andrew Mackie owns shares in Relx.

The post Down 36%, is this FTSE 100 growth stock still a long-term compounder? appeared first on The Twelfth Magpie.

For investors targeting £1,000 a month in extra income, here are two dividend stocks for investors to consider for the long term.

Building a growing second income

Aviva (LSE: AV.) remains one of my favourite FTSE 100 dividend stocks. While a forward yield of 6.7% is attractive, what stands out to me is the company’s ability to grow shareholder payouts over time.

As the chart shows, the dividend has increased at a healthy compound annual growth rate over the past five years. For investors hoping to build a second income, that matters because a growing dividend can help income keep pace with inflation while reducing reliance on continually adding new capital.

Chart generated by author

The business itself also appears well positioned to support future dividend growth. Although insurance remains at the heart of operations, Aviva has strengthened its presence in wealth and retirement markets, creating a more diversified earnings base. These areas benefit from long-term demographic trends, including growing pension savings and an ageing population.

The company also continues to generate strong levels of cash, allowing it to reward shareholders through both dividends and share buybacks. For me, that combination of income today and the potential for rising payouts tomorrow makes it an attractive option for long-term income investors.

Of course, there are risks. The integration of Direct Line will need to be executed successfully, while weaker financial markets could weigh on wealth-related earnings. Insurance profitability can also fluctuate as claims costs and competitive pressures change.

Even so, I believe Aviva has many of the characteristics income investors should look for when building a portfolio designed to generate a meaningful second income over time.

Different play

Aviva focuses on income today. RELX (LSE: REL) is different. It offers a lower yield, but a long track record of earnings growth and rising dividends that can compound over time.

The group continues to deliver steady underlying growth. FY25 results saw revenue up 7%, operating profit up 9%, and earnings per share up 10%. But the more important story sits beneath those figures: increasingly embedded analytics and decision tools that are becoming central to customer workflows.

Across all its divisions, growth is being driven by higher-value data, AI-enabled tools, and expanding platform adoption. In Legal in particular, double-digit growth is being supported by AI-powered workflow products such as Lexis+ AI, which deepen integration and increase switching costs over time.

This matters for income investors because it shifts RELX towards a more predictable, recurring revenue model. Pricing power and retention then support long-term dividend progression, rather than relying on a high starting yield.

The main risk is valuation. Much of RELX’s quality and stability is already well recognised by the market. This means future returns are likely to depend more on sustained execution than multiple expansion. A slowdown in professional end-market activity could also temper growth.

RELX is not a traditional income stock. But it is a dividend compounder, and that is often what drives more reliable second income streams over time. See the links below for further ideas.

Should you invest £5,000 in Aviva Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Aviva Plc made the list?

Andrew Mackie owns shares in Aviva and Relx.

The post Could these 2 dividend stocks help investors build a £1,000-a-month second income? appeared first on The Twelfth Magpie.

According to retirement industry estimates, a comfortable retirement can require annual income far above the State Pension alone. So what if an investor wanted to target three times the State Pension instead?

Crunching the numbers

How much would a Stocks and Shares ISA need to be worth to generate that level of income?

Using the widely respected 4% rule, the figures look like this:

• Matching the State Pension = £313,675
• Doubling the State Pension = £627,350
• Tripling the State Pension = £941,025

At first glance, those numbers are eye-watering. But the key point is that they are not designed to be built overnight.

Building it in real life

In practice, this is a long-term process driven by regular investing and compounding returns.

Assuming an 8% annual return over a 25-year horizon, the contribution path looks broadly like this:

• To match the State Pension, annual investing typically starts at around £4,000, gradually rising to £5,000 as savings capacity grow.
• To double the State Pension, contributions rise to roughly £8,000–£10,000 a year over the same period.
• To triple the State Pension, the requirement increases again to around £12,000–£15,000 a year, sustained over decades.

The exact figures will vary depending on market returns and timing. However, the relationship remains consistent: higher retirement income targets require a significantly higher and sustained level of investment.

Chart generated by author

Beyond high yield: compounding stability

Not every stock in an ISA needs to be a high-yield dividend payer. In fact, some of the most effective long-term holdings are those that quietly compound value over time.

That’s one reason I like RELX (LSE: REL). The group operates information and analytics platforms across legal, scientific, risk, and business data — areas where accuracy and trust matter more than speed alone.

The shares have been under pressure over the past year as investors worry about the impact of artificial intelligence. The concern is straightforward: if AI tools can generate summaries, draft analysis, and retrieve information instantly, could they weaken the role of traditional information providers?

At first glance, that argument is easy to understand. Large language models are improving rapidly, and they are already being embedded into professional workflows.

However, RELX is not simply a data provider. It sits inside regulated, precedent-driven industries where reliability, traceability, and accountability are essential. In these environments, raw AI output is not enough — it must be structured, verified, and integrated into professional workflows.

Rather than resisting this shift, the company is embedding AI into its own platforms, including tools like LexisNexis and its broader analytics suite. Management has also highlighted partnerships with leading AI developers to enhance, rather than replace, its existing services.

For long-term investors, the key point is consistency. RELX has delivered steady earnings growth, strong cash generation, and incremental innovation over time — all characteristics that support compounding within an ISA.

In the context of building a portfolio capable of bridging the gap between the State Pension and a more comfortable retirement, that kind of reliability matters just as much as high headline yields.

Should you invest £5,000 in RELX right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if RELX made the list?

Andrew Mackie owns shares in Relx.

The post How much would an ISA need to triple the State Pension and target £37,641 a year? appeared first on The Twelfth Magpie.

The core AI concern

The central concern is not that artificial intelligence can generate information, but that large language models could start to disintermediate parts of professional workflow software.

Nowhere is this debate more obvious than in legal services. LexisNexis sits at the centre of how lawyers search case law, build arguments, and manage complex workflows. Investors are increasingly asking whether AI tools could replicate or bypass parts of that process.

At first glance, the case is easy to make. LLMs already summarise legal documents, draft analysis, and retrieve information at speed. If they improve further, it raises a simple question: do traditional legal information providers risk losing relevance in the workflow chain?

A related issue is pricing power. If AI tools from large software groups sit between RELX and its customers, the concern is that control over access, distribution, and monetisation of data could weaken.

In short, the debate is not about whether AI exists, but whether it replaces parts of RELX’s position in the professional workflow stack.

Information vs knowledge

In practice, the concern about AI disintermediation often assumes that legal information is simply a question of retrieval. But the reality is more complex.

Law is not just information. Instead, it’s a structured, precedent-driven discipline built on decades of layered interpretation, professional standards, and jurisdiction-specific nuance.

Accuracy, traceability, and trust are essential — which is why raw AI outputs are not enough on their own.

Embedding AI tools

Rather than being displaced by new AI tools, the group is integrating them into its platforms. Management says it works closely with providers such as OpenAI and Anthropic, constantly testing new models and embedding those that add value.

The key issue is control of the workflow. Where AI improves how customers interact with legal content, it is built into products like Lexis+ AI. Where third-party tools sit outside the content layer, the group does not compete directly, but ensures its data can still be accessed through those environments.

In other words, the strategy is not to resist AI but to sit underneath it as the trusted content layer that powers it.

What’s the verdict

Having recently added RELX shares to my own portfolio after their sharp decline, I think the market may be overestimating the risk from AI disruption to its core legal business.

The concern assumes information can be easily commoditised. In my view, the real value lies in structured, trusted, and workflow-integrated data. The group is also enhancing this by embedding AI into its platforms, not being replaced by it.

That said, there is still uncertainty. If AI models evolve faster than expected, the competitive landscape could shift more than the market currently expects.

Should you invest £5,000 in RELX right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if RELX made the list?

Andrew Mackie owns shares in Relx.

The post After a 38% fall, are RELX shares still one of the FTSE 100’s best AI stocks? appeared first on The Twelfth Magpie.

Despite some periods of strength for the Footsie in 2026, British investors have been left watching American markets rally while domestic stocks overall are more sluggish.

But many analysts remain bullish about the UK market, with three stocks in particular tipped to make spectacular gains this year.

They are: RELX (LSE: REL), Experian, and Melrose Industries.

What does Wall Street expect of the S&P 500?

Major brokers expect the S&P 500 to rise by about 12% in 2026. Goldman Sachs lifted its year-end target to 8,000 on May 27, up from 7,600 in April.

Strategists said that forecast rests on 12% earnings per share (EPS) growth this time and a further 10% increase in 2027. Other major banks are clustering around the 7,400 to 7,800 range.

The average consensus is around 7,710, which would imply roughly 12% growth from the start of the year.

However, the range is wide, depending on earnings delivery and AI momentum.

Let’s see why analysts are bullish about some FTSE shares.

Three UK stocks tipped to do better

RELX shows the highest growth expectations of 71%, with a consensus target of 4,145p. Experian has the most analyst consensus strength, while Melrose Industries shows the widest range.

While these are 12-month targets, it’s realistic to expect half that growth to occur this year.

What prompts the high RELX expectations?

RELX is embedding AI functionality into its products at an accelerated pace, which CEO Erik Engstrom called “a key driver of our business for well over a decade.”

• The Risk division is using AI-enabled analytics and decision tools to drive strong underlying revenue growth, with 90% of revenue from machine-to-machine transactions.

• The Legal division is rolling out Generative-AI drafting, research copilots (Lexis+ AI), and analytics suites targeting higher revenue and expansion into corporate legal and compliance teams.

• The STM (Scientific, Technical & Medical) division is developing AI summarisation, literature-mapping, and EHR-integrated clinical decision pathways via its subsidiary Elsevier.

RELX is also shifting from traditional publishing to a platform-led, data-first model with recurring subscription revenue, now 75% of group revenues.

The business delivered a 9% rise in underlying operating profit in 2025, with free cash flow conversion near 90%+ of adjusted net profit.

The bottom line

All three of these stocks look promising, but RELX really stands out as one worth considering. But it’s not risk-free.

Ironically, the very same tech that’s a driver for growth (AI), is also the number one cause of fear among investors. And even though the company has been navigating change for over 100 years, AI’s real impact remains very unpredictable. 

Still, in my mind, the potential outweighs the risk. The company’s shift to recurring subscription revenue (75%), strong free cash flow (90%+ conversion), and disciplined M&A strategy support sustained growth.

And these are just three of many FTSE shares that show promise in 2026…

Should you invest £5,000 in RELX right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if RELX made the list?

Mark Hartley owns shares in RELX and Experian.

The post 3 UK stocks tipped to outperform the S&P 500 in 2026 appeared first on The Twelfth Magpie.

But two others particularly catch my eye. And one of them surprises me — but I’ll leave that for last.

Defence boost

BAE Systems (LSE: BA.) has soared more than 280% over the past five years — though that’s still way behind Rolls-Royce’s 1,100%.

Yet even after a rise like that, brokers expect even more. They have an average price target on the stock of 2,322p — around 11% above where were are today.

And looking at analyst models, my Twelfth Magpie colleague Mark Hartley recently concluded they had it around 25% below fair value.

The company’s latest trading update highlighted…

• Strong operational and financial performance so far in 2026.
• Full-year guidance maintained.
• Increased defence spending across all our key markets.
• Well positioned for growth over the medium term.

The main potential threats I see concern valuation and timing. We’re looking at a forecast price-to-earnings (P/E) ratio of 25 right now. And many will see that as at least fully valued.

And the defence business has been cyclical over the long term. Is it really wise to consider investing at a time when the future will hopefully be more peaceful?

Still, the changing world order means there might actually be years of defence growth to come, I think. So I’d say BAE’s worth looking into — even if it’s not for me.

Best till last?

And then we come to RELX (LSE: REL), which seems to have the City experts all excited. A full 14 out of the 15 I can find with recommendations urge us to Buy. And even the lone party pooper is only sitting on a Hold recommendation — so hardly a gloom merchant.

The 3,618p average target is about 50% higher than the share price at the time of writing, with the stock lagging the FTSE 100 over the past year.

So why all the optimism? It looks like it’s that AI thing…

The continued evolution of artificial intelligence is enabling us to add more value to our customers, as we embed additional functionality in our products, and to develop and launch products at a faster pace, while continuing to manage cost growth below revenue growth.

CEO Erik Engstrom, FY 2025 results

April’s AGM trading update continued along the same lines: “Strong underlying revenue growth continues to be driven across segments by our deeply embedded, AI-enabled analytics and decision tools.“

Bull vs Bear

I confess I’m pulled in two directions here. I certainly can’t ignore the surge in AI technology. But I’m just not sure which pioneers will pass the test of time — the rising tide lifting all boats thing.

Against that, RELX has a forward P/E of only 19 — and that could be cheap if it’s a long-term AI winner. Oh, and the company’s raised its dividend for 15 consecutive years — albeit with a modest yield under 3%.

Should investors be considering RELX as a way to earn dividend cash from AI? I am.

Should you invest £5,000 in BAE Systems right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if BAE Systems made the list?

Alan Oscroft does not hold any positions in the companies mentioned.

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