Top of the stocks: Taylor Wimpey plc, Bellway plc and Bovis Homes Group plc housebuilders’ double-digit rally

Can Taylor Wimpey plc (LON: TW), Bellway plc (LON: BWY) and Bovis Homes Group plc (LON: BVS) continue their double-digit share price and dividend rise?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

From risk on….

The stock market is an interesting beast, be that bull or bear it plays on our emotions and behavioural biases, which can make most of us, not to mention professional investors, look like monkeys from time to time.

Indeed, before the bank holiday everything was looking rosy. The polls were pointing to the UK remaining in the single market, oil was on a march higher, and in general the market was in a positive mood.

 ….to risk off

Just three days later and the mood of Mr Market started to swing in a more southerly direction. A combination of increasing uncertainty in the result of the upcoming EU referendum, the continued volatility of Sterling, and Brent crude dipping below the psychologically important $50 per barrel, helped to see the FTSE 100 close lower for the second day in a row at 6,191, albeit off its intraday lows.

Despite the renewed doom and gloom there have been some bright spots over the last month, which, in my view are worthy of note.

Safe as houses?

As we can see from the chart, it wasn’t just stocks exposed to the rising oil price that saw their share prices rise since the start of May. Indeed, like many other housebuilders, Taylor Wimpey (LSE: TW), Bovis Homes (LSE: BVS) and Bellway (LSE: BWY) all beat the market by double-digits – until today when the fear of a Brexit, or more to the point the ramifications of a Brexit, struck their share prices again yesterday.

However, as I’ve written before it’s important for investors to cut through the noise and focus on the actual investment – not the continual news flow that can cause even the best of investors to lose their focus from time to time.

While I would be the first to accept that retaining your focus in times like these is much, much harder in practice, investors in my view should look at the news flow from the companies themselves.

In fact, the news flow has been nothing but positive with the general view that the UK new-build housing market remaining very positive across most of the UK, with a healthy and controlled lending environment providing good accessibility to mortgages at competitive rates.

Indeed, consumer demand and confidence remain high, and in central London (an EU result-sensitive market), the trading environment continues to be stable.

For those that have mentioned the dreaded ‘B’ (Brexit) word, it’s only to highlight that it has had no discernible impact on trading.

Cash in the attic

With trading continuing in line with expectations (despite what could happen on or after 23 June) management at these firms seem to have learned their lessons from the 2008 financial crisis. They continue to focus the businesses on sustainable growth while returning excess cash to shareholders via double-digit dividend increases or special dividends, meaning that despite what you may read in the general press, these shares are definitely worthy of further consideration.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Dave Sullivan has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Up 75% in 5 years, I reckon this FTSE 250 still has lots to give!

Our writer explains why this FTSE 250 stock could still continue to provide growth and returns despite already being on…

Read more »

Investor looking at stock graph on a tablet with their finger hovering over the Buy button
Investing Articles

2 high-quality FTSE 250 stocks to consider buying

The FTSE 250 is home to some of the best investment opportunities out there. This Fool highlights two stocks for…

Read more »

Investing Articles

The Marks and Spencer share price dips! Is this my chance to buy?

Marks and Spencer was one of the hottest stocks on the market last year. With its share price falling in…

Read more »

Growth Shares

How low could the boohoo share price go?

Jon Smith explains why the enterprise value and the low risk of bankruptcy should help to prevent the boohoo share…

Read more »

Young Asian woman with head in hands at her desk
Investing Articles

Down 23% in a year! Can the Diageo share price regain £30 in 2024?

This Fool UK writer is checking the charts to see if the Diageo share price can recover from the recent…

Read more »

Asian man looking concerned while studying paperwork at his desk in an office
Investing Articles

I wouldn’t touch this FTSE 100 stalwart with a bargepole

Despite looking like a bargain on paper, this Fool is avoiding FTSE 100 constituent Vodafone at all costs. Here he…

Read more »

Investing Articles

I’m waiting for the Rolls-Royce share price to pull back before I buy

The Rolls-Royce share price has been the Footsie's best performer in the last year. But this Fool has no intention…

Read more »

Front view photo of a woman using digital tablet in London
Dividend Shares

2 dividend stocks to take me from £0 to £9.5k in second income

Jon Smith talks through some ideas with second income potential, including one stock that has a dividend yield above 10%…

Read more »