Interesting to look at some of the below companies:
Taylor Wimpey: Dividend = ~10.9%. PE = ~7.4. YTD down ~20%
Barratt Developments: Div = ~8.8%. PE = ~7.3. YTD down ~20%
Kier: Div = ~8.3%. PE = ~6.3. YTD = down ~19%
Countryside Properties: Div = 4.5%. PE = ~7.0. YTD = down ~15.%.
These sorts of stocks aren’t usually something I would look into, but they seem remarkably cheap considering their yield/dividend. I imagine Brexit and other late-cycle factors are pushing down the UK stock prices, and perhaps a housing slump is factored into their price, but their underlying performance this year is still up.
What is everyone’s thoughts on these? Are they good value or are they reflecting a likelihood of a further Brexit/late-cycle fall?
They’re very high risk in the face of brexit, which could mean high returns if all goes well. I remember Bovis Homes sank by -70% when the brexit vote came in (before recovering to some extent on the day), this was the hardest hit but shows the potential risk for a house builder in a downturn. TW is probably the strongest of them.
I’ve just had a look at how many of these are being shorted and Kier’s the second most shorted stock on the FCA’s list at the moment!
House prices are forecast to grow especially outside of London in the coming years. It’s hard to say on timing, sometimes fortune favours the brave!
