Will Taylor Wimpey plc outperform Bovis Homes Group plc, Bellway plc and Barratt Developments Plc after trading statement?

Does Taylor Wimpey plc (LON:TW) (TW.L) have more investment potential than Bovis Homes Group plc (LON:BVS) (BVS.L), Bellway plc (LON:BWY) (BWY.L) and Barratt Developments Plc (LON:BDEV) (BDEV.L)?

Taylor Wimpey plc
Taylor Wimpey plc

Taylor Wimpey plc (LON:TW) (TW.L) has released a trading update today. It shows that the company has performed relatively well, with the UK housing market remaining positive through H2. Customer demand has been resilient, with high mortgage availability, high employment and the Help to Buy scheme all helping to boost the company’s performance.

Sales rates for the year to date have been strong at 0.81 sales per outlet per week. This is up on last year’s figure of 0.75. The current total order book of 8,751 homes is slightly lower than last year’s 8,981 figure. Build costs are expected to increase by between 3% and 4% this year, with greater pressure coming from labour costs.

Taylor Wimpey has reported that the land market remains very attractive. It continues to acquire land on compelling financial metrics. It is on track to deliver results for the 2017 financial year which are in line with its expectations. It anticipates further growth in the 2018 financial year. It has also confirmed the 2018 financial year dividend of £500 million.

In the last 6 months the Taylor Wimpey share price has fallen 2%. That’s a worse performance than other UK housebuilders such as Bovis Homes Group plc (LON:BVS) (BVS.L), Bellway plc (LON:BWY) (BWY.L) and Barratt Developments Plc (LON:BDEV) (BDEV.L). Bovis is up 24%, Bellway has gained 17% and Barratt Developments has gained 2% during the same time period.

In my view, Taylor Wimpey has investment appeal for the long run. I’m bullish on the outlook for UK house prices and feel high demand coupled with low supply could lead to improved returns for companies operating in the sector. With the company having a large order book and acquiring further plots of land, it seems to have a solid foundation for further growth. Alongside its generous dividend, this could make it a good addition to my ISA for the long run.

About Robert Stephens 3883 Articles
Robert Stephens is a CFA Charterholder and an Equity Analyst by trade. He is a passionate private investor who has been buying and selling shares for many years, owning a wide range of UK shares in the process. He has written for Citywire and The Motley Fool US and now runs his own business. To contact Robert, please email [email protected] or use one of the other contact methods available on the 'Contact Us' page