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As a veteran worth and earnings investor, I’m consistently looking for out low cost shares. Ideally, I’m on the lookout for stable firms with shares buying and selling at low valuations, or companies paying market-beating dividend yields to affected person shareholders. In consequence, my household portfolio presently contains round 25 totally different FTSE 100 and FTSE 250 shares.
Just lately, I’ve discovered one other promising candidate that we don’t personal (as but).
Public property
Digging round within the FTSE 250, I noticed a well-recognized title whose shares have fallen in 2025, pushing their money yield into double digits. This firm is Taylor Wimpey (LSE: TW), one of many UK’s largest listed housebuilders.
Taylor Wimpey was created by bringing collectively rival teams Taylor Woodrow and George Wimpey in July 2007, simply as world inventory markets have been peaking. The corporate’s origins return to George Wimpey’s first partnership in 1880 and Frank Taylor’s first development challenge in 1921, so it has a long-established pedigree.
Alas, this merger accomplished simply earlier than the worldwide monetary disaster ravaged markets. From Could 2007 to December 2008, Taylor Wimpey’s share worth collapsed by an astonishing 98%. Nevertheless, by August 2005, the inventory was buying and selling above £2, having made an unimaginable comeback.
Sliding shares
Because of increased UK rates of interest, this FTSE 250 inventory has been a dropping wager since Covid-19 crashed capital markets. Over the previous 5 years, the shares have have misplaced virtually a 3rd (−32.3%) of their worth. Additionally, over the past 12 months, this inventory has dropped by 19%.
Then once more, the above figures exclude money dividends, that are very beneficiant from this property inventory. As I write, Taylor Wimpey shares commerce at 101.9p, valuing the group at £3.6bn — huge for the mid-cap index, however too small for the elite FTSE 100.
At these ranges, the shares supply a bumper dividend yield approaching 9.2% a 12 months. This is among the highest money returns amongst FTSE 350 inventory. That’s why Taylor Wimpey is now on my watchlist of potential buys.
Dividend delight?
Then once more, expertise has taught me that ultra-high dividend yields may be purple flags. As these payouts aren’t assured, they are often reduce or cancelled at brief discover. How is Taylor Wimpey’s dividend historical past? Right here goes:
| 12 months | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
| Whole dividend | 4.67p* | 9.46p | 9.58p | 9.4p | 8.58p | 4.14p** |
| Change | (Ultimate dividend solely) | −1.3% | +1.9% | +9.6% | — | (Interim dividend solely) |
Taylor Wimpey skipped its closing dividend for Covid-hit 2020 and has but to declare a closing dividend for 2025. Nevertheless, the dividend has hardly budged since 2022, following a modest reduce final 12 months. Therefore, I don’t count on huge dividend will increase anytime quickly.
It’s value noting that this group had internet money of £326.6m on its steadiness sheet at mid-2025. Nevertheless, this determine is down from £564.8m at end-2024 and £677.9m at end-2023. However this decline is basically down to purchasing extra land to construct on.
In abstract, I just like the look of this FTSE 250 inventory as a dividend play. Nevertheless, except the UK property market improves considerably, I can’t see it turning right into a go-go progress inventory. Then once more, rate of interest cuts would possibly ship a lift to the housing market in 2025.
What different shares look extra thrilling immediately?
