How Has This Housebuilding Stock Performed Lately - Taylor Wimpey?

  • Feb 13, 2019 GMT
  • Team Kalkine
How Has This Housebuilding Stock Performed Lately - Taylor Wimpey?

Overview

Taylor Wimpey (TW.L) was formed in the year 2007, post-merger of George Wimpey and Taylor Woodrow. It has company headquarter based out at High Wycombe, the United Kingdom with operations department in the UK and Spain. It is the largest UK based homebuilders and has 24 offices beyond England, Scotland and Wales. The company builds various types of homes in the UK like apartments to six-bedroom homes; with a specific price range and includes private as well as affordable homes. The company has the intent to deliver the best houses for customers while the houses are the ones useful to be built. In the UK, the company has three divisions - North, Central-South West and London-South East divisions. In the Spain, they develop good quality homes at various locations - Costa Blanca, Costa del Sol and the islands of Mallorca and Ibiza. Business operations also spread across supply chain logistics, known as Taylor Wimpey Logistics. In the logistics business, they provide the delivery of construction related material. The company share is traded at London Stock Exchange and part of FTSE 100 benchmark index.

On year on year basis, 2017 revenue from north division surged by 8% to £1334.5m; Central & South West Division increased by 7% to £1291.2m; London & South East Division surged by 9% to £1236.3m, and the Spain market rose by 1% to £94.2m. The critical aspect has been the total dividends paid per share that amounted to 13.79 pence. At the end of 2017, the secured order book stood at £1,628m (+0.1% year on year), and represented 7,136 homes driven by new construction contracts signed in the amount of £4m in the current year as compared to £52m last year in the same period.

millionsFigures in millions (Source: Company Research, TR)

 

Relative Valuation Metrics

Valuation(Source: TR)

Stock Performance

At the time of writing, the stock was trading at GBp 165.85, up 0.94% as at mid-day trading on February 13, 2019. 52 Week high/low of the stock is GBp 195.55/GBp 127.80. 1-year return for the share is -5.5%, while broader index FTSE 100 has shown positive performance during the same period.

Although the current revenue growth looks decent, the expansion phase may slow down considerably after the completion of existing large projects. Tight competition for large contracts, accompanied by rising construction input prices, may add to the risks. The availability of the workforce is likely to remain tight, which may lead to delays in construction schedules.

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