I think Taylor Wimpey (LSE: TW.) could be one of the best FTSE 100 stocks to consider buying in a downturn. The share price is down 24% in the past five years, and we’re looking at a 5% fall so far in 2025.
But the slide has pushed the forecast dividend yield up as high as 8.1%, in line with the payout for 2024.
Demand returning?
The year to December 2024 saw falls in build completions and average selling prices. But they were only modest dips, in line with expectations. And considering the interest rate pressure on home buying, I liked what I saw.
At results time the current year had started out well. The private net sales rate was up 12% to 0.75 per outlet per week. The company noted “some incremental improvement in market pricing“.
On the negative side, we were told that “we have begun to see modest build cost inflation and we expect this to be low single digit for the year“.
The ending of stamp duty relief, and reduction in interest rate cut expectations, could still hurt. And I think sentiment could remain sour for some time yet. But I’m considering buying some alongside my Persimmon holding.
Insurance cycle
I rate the insurance sector as needing the longest of long-term investing horizons. It really can be very volatile, and the short-term ups and downs can be severe. But what better time to think about buying Legal & General (LSE: LGEN) then when the forward dividend yield’s up to 9%?
We’ve seen a 28% share price rise in the past five years. But it’s been falling since 2022, and over the past 10 years the stock’s been flat.
Legal & General’s in a very competitive business. And along with the whole financial sector, it’s at the sharp end of danger from economic pressure. We’ve certainly seen plenty of that in recent weeks, and I expect a whole load more.
I really do think the share price could still have a very rocky ride ahead of it, at least in the shorter term. But this is another favourite sector of mine, having bought Aviva shares some years ago. I’m thinking of adding some Legal & General.
Risk settling?
I rate WPP (LSE: WPP) as probably the riskiest of the three I’m looking at today. The media agency has fallen from its former glory under founder Sir Martin Sorrell. And it’s been out of favour with investors since his controversial departure in 2018. The stock slump since then means the WPP share price is back to where it was at the start of the current century.
But that does move the expected dividend yield up to 7%. And the forward price-to-earnings (P/E) ratio’s down under nine. In a first quarter trading update Friday (25 April), the company reiterated its full-year guidance.
Speaking of trade war fears, the update said: “While WPP is not itself directly affected by tariffs, they will impact a number of our clients.” But so far, the firm has “not seen any significant change in client spending“.
Am I being rash to look at buying WPP now, with the economic outlook so shaky? Perhaps, but I’m definitely considering it.
