Yahoo Finance Why Taylor Wimpey plc (LON:TW.) Is An Attractive Investment
I’ve been keeping an eye on Taylor Wimpey plc (LON:TW.) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe TW. has a lot to offer. Basically, it is a financially-healthy company with a a strong history of performance, trading at a great value. Below is a brief commentary on these key aspects. If you’re interested in understanding beyond my high-level commentary, read the full report on Taylor Wimpey here.
Flawless balance sheet established dividend payer
TW. has a strong track record of performance. In the previous year, TW. delivered an impressive double-digit return of 21.5% Unsurprisingly, TW. surpassed the Consumer Durables industry return of 16.3%, which gives us more confidence of the company’s capacity to drive earnings going forward. TW.’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. TW.’s has produced operating cash levels of 4.91x total debt over the past year, which implies that TW.’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
TW.’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. Investors have the opportunity to buy into the stock to reap capital gains, if TW.’s projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the consumer durables industry, TW. is also trading below its peers, relative to earnings generated. This bolsters the proposition that TW.’s price is currently discounted.
Next Steps:
For Taylor Wimpey, there are three pertinent aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for TW.’s future growth? Take a look at our free research report of analyst consensus for TW.’s outlook.
Dividend Income vs Capital Gains: Does TW. return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from TW. as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of TW.? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
