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Big dividends, growth, AND value! A stock I’d buy for my ISA and hold until 2030

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Regular readers will know that I’m a big fan of the housebuilders and their ability to dole out chunky dividends. Vistry Group (LSE: VTY), which up until recently was known as Bovis Homes, is one that I think looks particularly tasty today. Why? The FTSE 250 firm’s 5.2% forward yield smashes the corresponding average of 3% for Britain’s mid caps.

It’s not just a top stock for income chasers, however. A price-to-earnings (P/E) ratio of 10.9 times underlines its position as a great value bet. City expectations of a 22% profits bump for 2020 is likely to turn plenty of growth investors’s heads, too.

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Britain needs to get building!

There’s a reason why Vistry’s share price has ballooned more than 40% over the past 12 months. It’s trading at record highs around £14.40 per share as I type, too. The UK might be facing unprecedented economic and political uncertainty (certainly in modern times). And it’s likely that Brexit-related turbulence will persist in 2020 and possibly beyond, too. However, the level of housebuilding in this country is still unlikely to match demand looking well into the new decade.

A report released by The Times illustrates just why. Government might talk tough on getting 300,000 homes built each year in the near future but authorities remain ineffective in helping these targets be hit. It says that 15% of applications to build major residential developments have been subject to delays in the past five years.

The paper, quoting numbers released from the housing ministry, says that there have been 6,500 applications for major projects of 10 properties and above in that time that have failed to receive a decision by local councils within the legal time limit of 13 weeks.

Another year of progress?

It’s not a surprise that the likes of Vistry continue to report solid demand for their newbuilds, then. There simply aren’t enough of them to go around, a situation that has been exacerbated by low interest rates, growing competition in the mortgage loans market, and the government’s Help to Buy purchase incentive scheme in driving first-time buyer interest. These are all factors that look set to support the housing market for some time, too.

Vistry highlighted the strength of the market in its trading update of mid-January. In it the builder said that it had enjoyed a “significant step up in average weekly sales” in 2019, to 0.58 from 0.5 in the prior year. As well, the FTSE 250 firm saw average selling prices rise by almost £6k year on year from 2018 levels, to £279,000.

We may be early in the year but so far things look good for another strong year in 2020, too. Vistry lauded its “strong forward sales position” and added that “trading to date has been very positive.” It certainly appears in great shape to keep paying market-mashing dividends in the near term, then (it also had £362m worth of net cash on the books at the end of 2019). And I fully expect it to keep delivering awesome shareholder returns well into the new decade.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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