Taylor Wimpey (TW.) & Barratt (BDEV): 2 stocks to buy and hold

Highlights 

  • Taylor Wimpey’s board declared an interim dividend of 4.14 pence per share for H1 2021.
  • For the full year ended 30 June 2021, Barratt Developments total home completions rose to 17,243 from 12,604 in 2020.

Average housing prices in the UK rose by £44 per day in the six months to August, according to Zoopla Index. Housing prices in the UK rose by £30 per day over the six-month period from July 2020 to January 2021. In August, the average house price in the UK was £235,000. However, housing prices have seen variation and the price rise is not consistent across various cities in the UK. For instance, the average house prices in Cambridge grew by £23,357 since March 2020, and that in Aberdeen declined by £2,600.

High buyer demand can be attributed to lifestyle changes brought about by consecutive lockdowns. Nevertheless, tapering of stamp duty holiday in Northern Ireland and England from July, ending of government support via furlough scheme, and challenging economic conditions may impact demand in Q4 2021.

Taylor Wimpey (TW.) & Barratt (BDEV): market cap, dividend & one year return

(Data source: Company release & Refinitiv)

Let us deep dive into two dividend-paying FTSE 100 listed housebuilding stocks – Taylor Wimpey and Barratt Developments.

Taylor Wimpey Plc (LON: TW.)

Taylor Wimpey is one of the leading housebuilding companies in the UK. Its market capitalisation currently stands at £6,036.90 million as of 28 September 2021. Recently, Taylor Wimpey completed the acquisition of land to develop private and affordable homes in Winchburgh. It launched Bingham Gate development project in Nottinghamshire.

The shares of Taylor Wimpey are trading at GBX 164.90, down slightly by 0.39% in the early trading at 8:13 AM BST on 28 September 2021. The shares returned 63.22% to shareholders in the last one year.

For H1 2021 ended 4 July 2021, Taylor Wimpey recorded 7,303 home completions compared to 2,771 in H1 2020. Its net cash at the end of the period was £906.5 million compared to £497.3 million in H1 2020. Its revenue grew from £754.6 million in H1 2020 to £2,196.3 million in H1 2021, representing a 191% year-on-year growth.

Taylor Wimpey’s board declared an interim dividend of 4.14 pence per share for H1 2021.

Barratt Developments Plc (LON: BDEV)

Barratt Developments is involved in UK-based commercial and housebuilding development operations.

The shares of Barratt Developments are trading at GBX 684.80, down slightly by 0.03% in the early trading at 8:14 AM BST on 28 September 2021. The shares returned 50.68% to shareholders in the last one year. The company’s market capitalisation is £6,984.02 million as of 28 September 2021.

For the full year ended 30 June 2021, Barratt Developments’ total home completions rose to 17,243 from 12,604 in 2020. The company recorded a profit before tax of £812.2 million in 2021 compared to £491.8 million in 2020. Its revenue for 2021 was £4,811.7 million compared to £3,419.2 million in 2020.

Barratt Developments’ board declared a dividend of 21.9 pence per share for 2021.

Bottomline

Investors keen on diversifying their portfolios often invest in housebuilding stocks. The high demand for housing currently presents an attractive investment landscape for income investors. However, investors must closely monitor all aspects of housing stocks as their performance depends on the macroeconomic conditions.

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