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Taylor Wimpey vs Lennar: is there more value in a US housebuilder?

08/08/2019 · Lennar (LEN)  · Taylor Wimpey (TW) 

Housebuilders Investment Ideas UK US

Street with new houses

UK housebuilders offer tempting yields, while at least one US firm is reporting improving trading conditions. But do these firms offer real value at this point in the cycle?


The Taylor Wimpey (LON: TW) share price has made little progress in recent years. On a four-year view, the FTSE 100 housebuilder's share price is down by 5% at the time of writing. Although dividend payments have provided a cash yield of around 35% over that period, shareholders have also had to ride out a fair amount of volatility. The share price fell by 30% after the 2016 referendum and repeated this fall in the 2018 market sell-off.

Across the Atlantic, the picture is eerily similar. The share price of Florida-based housebuilder Lennar (US: LEN) has tracked that of Taylor Wimpey closely. Lennar stock was down by about 8% over four years, at the time of writing.

The chief executives of both firms have recently reported strong order books, good access to mortgage finance and stable demand. But while Taylor Wimpey boss Pete Redfern warned last week of rising costs and "ongoing political and macro-uncertainty", Lennar chief executive Rick Beckwitt recently reported…

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