Some FTSE 100 stocks regularly grab the headlines and yet struggle to create wealth for their investors. Others quietly deliver. Today, I’m looking at two of the latter that have been massively outperforming the index.

Top stock

Shares in clothing and homewares retailer Next (LSE: NXT) have been on a tear, rising 43% in the last 12 months and 26% in 2024 so far. This compares (very) favourably to the FTSE 100 gains of 8% and 7% respectively.

The firm’s most recent update provides me with a snapshot of why things are going so well. In September, Next raised its profit forecast for the year to £995m after full-price sales of the first six weeks of H2 “materially exceeded” expectations.

So much for a cost-of-living crisis — this company is firing on all cylinders!

Big seller

Interestingly, the shares now change hands at a price-to-earnings (P/E) ratio of 16. That’s on the expensive side when it comes to consumer cyclical stocks. So, Next needs to keep impressing the market.

There’s another thing that’s got my attention. It was recently announced that leader Lord Wolfson had sold 290,000 shares, equivalent to more than £29m.

The fact that the index’s longest running CEO has chosen to jettison such a huge chunk of stock now is worth noting. I’d be tempted to do the same, if only because fashion retailing is a notoriously tough game. Next is also heavily dependent on the UK market, although it’s now also looking abroad.

It will be interesting to read the Q3 trading statement — due 30 October — and note the market’s reaction to it.

Riding the rebound

A second top-tier company outperforming the FTSE 100 has been Intercontinental Hotels (LSE: IHG). Its value has climbed 40% in the last year and 19% in 2024.

Maybe this firm isn’t exactly a household name. But at least some of its 19 hotel brands — including Holiday Inn — will surely be familiar to many if the big recovery in demand following the pandemic is anything to go by.

In some parts of the world, trading remains stellar. In August, Intercontinental revealed 3.2% in growth in Q2 revenue per available room (RevPAR). Business in the US has been particularly good.

Fully valued?

Like Next, this business scores high when it comes to operating margins and returns on the money it puts to work. But also like Next, it’s valuation now looks quite frothy.

A P/E of 25 isn’t ridiculous, at least relative to your average US tech titan. But I do have a few concerns.

Despite those great gains, the shares were quite volatile during the summer as a result of sluggish trading at rivals, particularly in Asia. In line with this, Intercontinental’s RevPar in China fell by 7% in Q2. There are also worries about whether the US might enter a recession.

A trading update on 22 October might provide some clues about the direction of travel from here. I’d say a lot depends on whether China’s recently-announced stimulus measures manage to reverse slowing economic growth. The Federal Reserve’s desire to achieve a ‘soft landing’ for the US economy could also dictate this firm’s near-term trading outlook.

With this in mind, I’m not racing to buy today. But it’s possibly one for me to buy on the dip.