Persimmon’s (LSE: PSN) a share that’s really lagged behind its blue-chip brothers Taylor Wimpey (LON:TW) and Barratt Developments (LON:BDEV) in recent months.
Whilst these FTSE 100 housebuilders have enjoyed a rip-roaring start to 2019, Persimmon’s share price has failed to produce similar fireworks. It’s long overdue for a northwards surge, in my opinion, and I believe fresh trading numbers due on Wednesday could provide the catalyst for such a move.
The company certainly impressed in February when it announced completion numbers up by 406 homes to 16,449 in 2018, which along with a marginal rise in average selling prices, pushed revenues 4% higher to £3.74bn. Combined with a significant improvement in margins, the builder’s pre-tax profits soared 13% to £1.09bn.
Industry data on the housing market has remained pretty robust since then, and so there’s plenty of reason to expect another great update.
As for dividends, the City forecasts another 235p per share reward in 2019 and that yields a show-stopping 10.4%. This, combined with a low forward P/E ratio of 8 times, makes Persimmon (LON:PSN) a terrific buy today, I think.
Pay master Preliminary results due from PayPoint (LSE: PAY) on May 24 could prompt fresh waves of buyer interest here as well.
The FTSE 250 firm’s already gained 16% in value so far in April, taking it through the £10 per share marker for the first time since last June. Investors are excited by the rate at which demand for PayPoint’s retail systems is surging, the tech titan having upgraded its adoption target for the PayPoint One terminal to 12,700 sites by the close of the fiscal year to March 2019.
This was up 300 sites from its prior goal and I’m expecting the business to have drawn up another ambitious target for the current year. Make no mistake: the broad range of operations that PayPoint’s cutting-edge products allow is transforming the way retailers do business, and I’m expecting the company to paint another sunny trading picture when it updates the market next month.
Right now the company carries a forward P/E ratio of 14.9 times and a jaw-dropping 8.5% dividend yield. All things considered I think it’s a great buy right now.
Pints powerhouse My final selection for this piece, Marston’s (LSE: MARS), is set to release half-year results on May 15. It’s true that the tough economic environment is crimping our disposable incomes but I’m tipping the pub operator to churn out another set of lovely numbers.
The small-cap has proven its resilience in tough conditions time and again, and in its most recent update advised that like-for-like turnover at its pubs rose 1.4% sales in the 16 weeks to January 19, a period which included record Christmas trading when comparable sales shot 5.7% higher.
Marston’s has vowed to keep dividends around recent levels of 7.5p per share and this creates an enormous 7.3% yield for the 12 months to September 2019. City brokers are predicting steady earnings growth through this period to support this estimate, and with the business also embarking on asset sales, I believe it’s in good shape to meet this theoretical payment.
Throw a mega-low forward P/E ratio of 7.4 times into the bargain and I reckon Marston’s is a splendid share to load up on.
Royston Wild owns shares of Barratt Developments and Taylor Wimpey. The Motley Fool UK owns shares of PayPoint. 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.
Motley Fool UK 2019