Vistry (VTY) & Redrow (RDW): 2 dividend stocks to cash in on housing boom

Highlights 

  • Vistry Group’s total completions during H1 2021 was 5,351, representing an increase of 76% year-on-year compared to 3,034 in H1 2020.

  • For the year ended 27 June 2021, Redrow’s revenues reached £1.94 billion, representing a year-on-year increase of 45% compared to £1.34 billion.

Housing prices in the UK have been witnessing growth over the past year. The trend has been auguring well for property stocks, which would have otherwise been affected significantly by the COVID-19 pandemic. During an economic crisis, people refrain from making new financial commitments.

A favourable regulatory climate has played a pivotal role in reversing this trend. Implementation of stamp duty holiday offered a huge impetus to the already booming housing market. The stamp duty holiday was initially applicable for property value up to £500,000 and the limit was reduced to £200,000 in July. It is expected to end entirely in October 2021. 

Image description: 2 FTSE 250 housebuilding stocks - Vistry & Redrow

(Data source: Company Release)

Let us take a detail look at 2 FTSE 250 listed housebuilding stocks to add to your portfolio

Vistry Group Plc (LON: VTY)

Vistry Group is a UK-based housebuilding and regeneration specialist. The group’s total completions during H1 2021 was 5,351, representing an increase of 76% year-on-year compared to 3,034 in H1 2020. Vistry Group’s shares closed at GBX 1,205.00, on Wednesday 15 September 2021. Its market cap currently stands at £2,678.66 million.

In the half-year ended 30 June 2021, Vistry’s revenue increased to £1.25 billion from £606.4 million for the same period in the previous year. The company recorded a pre-tax profit of £156.2 million in H1 2021 compared to the loss of £12.2 million in H1 2020.

Vistry Group declared an interim dividend payout of 20 pence per share for shareholders for H1 2021, payable 19 November 2021.

In the last one year, the shares of Vistry Group returned 102.35% to shareholders.

Redrow Plc (LON: RDW)

Redrow features among the leading housebuilders in the UK and operates through a network of 14 divisions. Redrow’s shares closed at GBX 701.20, on Wednesday 15 September 2021. Its market cap currently stands at £2,468.85 million.

For the year ended 27 June 2021, Redrow’s revenues reached £1.94 billion, representing a year-on-year increase of 45% compared to £1.34 billion. It recorded a 124% year-on-year increase in pre-tax profit from £140 million in 2020 to £314 million in 2021. The company’s net cash as of 27 June 2021 was £160 million.

Redrow declared a final dividend of 18.5 pence per share for the year ended 27 June 2021.

In the last one year, the shares of Redrow returned 53.66% to shareholders.

Conclusion
Investor’s keen on diversifying their portfolios have rushed to cash in on the housing boom fuelled by the implementation of the stamp duty holiday scheme. While the housebuilding stocks are giving good returns to the investors, they also are well suited for long term income investors with their regular dividend announcements.

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