Christopher Johnson: Welcome to Dividend Watch, my name is Christopher Johnson.
According to UK investors, Taylor Wimpey [TW.], the British home construction business, is one of the stocks to watch for Q4.
With Labour’s Budget fast approaching, which markets expect will include the government’s strategy to improve housing affordability, as well as interest rates decreasing, Taylor Wimpey’s share price is expected to rise, ending its low valuation status.
The stock could be one of the companies that will help the FTSE 100 reach record highs by the end of the year. However, Taylor Wimpey’s half-year results for the period up to June 30th were disappointing.
The company only built 4,728 homes, a significant drop from figures in the first half of 2023 of 5,120. Taylor Wimpey also saw its profit before tax fall 58.1% from £237.7 million in H1 of 2023 to £99.7 million in H1 of 2024.
Yet the UK’s new Labour government has set a target of building 1.5 million homes in five years and to reform the UK’s planning system to speed up the pace of new developments. If successful, investors anticipate that housebuilding stocks like Taylor Wimpey will benefit.
Taylor Wimpey is currently trading at £1.64, slightly below its Morningstar Fair Value Estimate of £1.90 per share. It pays a quarterly dividend worth 2.4 pence to investors.
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