LONDON -- The FTSE's homebuilders have been enjoying a very strong recovery since last summer, with share prices soaring. They all suffered badly during the recession, but most of them took the opportunity to build up their land banks while the brown stuff was cheap, and they're nicely placed to take advantage of a longer-term upturn in demand.
Results season
We should get some idea of how well that recovery is going next week, as we get results from five of them. On Monday, we'll have full-year figures from Bovis Homes (BVS 2.77%) andPersimmon (PSN 1.79%). Persimmon is a member of the Fool's Beginners' Portfolio, and I'll be paying special attention to that. Friday brings us the third set of full-year results for the week, from Taylor Wimpey (TW 1.70%).
We also have half-year results coming from Redrow (RDW +0.00%) on Tuesday and Barratt Developments (BDEV 1.83%) on Wednesday, so it could pay to have a look over their fundamentals in advance. Here's a quick snapshot of all five homebuilders reporting results next week:
The "Rise" column shows the share price rise over the past 12 months, and the "P/E," "EPS Growth," and "Dividend" columns show forecasts for the current year and next year.
|
Company |
Price |
Rise |
P/E |
EPS Growth |
Dividend |
Results |
|---|---|---|---|---|---|---|
|
current/next |
current/next |
current/next | ||||
|
Barratt Developments |
236p |
82% |
17/12 |
68%/44% |
0.9%/1.7% |
27 Feb* |
|
Bovis Homes |
663p |
34% |
23/17 |
63%/38% |
1.3%/1.8% |
25 Feb |
|
Persimmon |
871p |
16% |
16/14 |
46%/19% |
0.1%/5.1% |
25 Feb |
|
Redrow |
193p |
50% |
17/12 |
3%/38% |
1%/1.6% |
26 Feb* |
|
Taylor Wimpey |
78p |
56% |
19/15 |
94%/29% |
0.9%/1.2% |
1 Mar |
* Barratt and Redrow have years ending June, so current columns are for the year to June 2013 and results are for the half-year to December. The others end their years in December, so current columns are for December 2012 and results are full-year results.
Rising valuations
All of these builders have clearly had a great year as far as share prices go, and that's on the back of steadily improving financial performances. The current price-to-earnings (P/E) ratios perhaps look a little high, all being above the long-term FTSE average of about 14. But with those very strong forecast rises in earnings per share, forward P/E values for the following year are all falling.
Some of those forecast earnings improvements will be coming from property price expectations, and that is supported by other sectors -- we have been seeing price rises for real-estate investment trusts, too.
Dividends creeping back
Dividend yields are still low, except for Persimmon, which has already announced its planned payout for next year -- so that 5.1% is pretty much certain. And we should be seeing the rest lifting their dividends over the next couple of years.
So are any of these five builders still good value? Well, that's for you to decide, but I'm quite happy to be holding Persimmon shares in the Beginners' Portfolio.
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