Taylor Wimpey shares: here’s what I’d like to do

first_img I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Enter Your Email Address Royston Roche | Monday, 22nd March, 2021 | More on: TW Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Taylor Wimpey (LSE: TW) shares are up about 60% in the past year. Compare this to 30% return of the FTSE 100 index in the same period. The stock has outperformed by a wide margin to the broader index. The homebuilder’s stocks are in focus as the UK exits lockdown in a phased manner. Another reason for me to look into these stocks is the government’s support to new home buyers. I would like to analyse this FTSE 100 stock further to understand to see if it’s a potential buy for my long-term portfolio.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Bullish reasons to buy Taylor Wimpey sharesChancellor Rishi Sunak announced the new mortgage guarantee scheme during the budget. The scheme will encourage more first-time buyers to buy a new home for a minimum 5% deposit. This should help leading homebuilders like Taylor Wimpey. Due to the various challenges in the past few years and slow growth of wages, we did see lower interest in home buying. With more government support we could see renewed interest in this sector.The company released its annual results recently. Revenue fell by 36% year-over-year to £2.8bn. The drop in revenue was primarily due to the lockdown. The company did see positive rebound in the second half of the year. The UK forward order book is strong at 10,685 homes as at 31 December 2020. Another important metric is that the average selling price increased to £288k when compared to £269k for the previous year.Taylor Wimpey has a stable balance sheet, with net cash of £719.4m. The company has resumed its ordinary dividend policy, that is, 7.5% of net assets. It announced a final dividend of 4.14p. A decent dividend is another reason for me to like Taylor Wimpey shares.The company made further land purchase last year at attractive prices during the Covid-19 pandemic. It has sufficient land bank to provide growth in the long term. Looking into the future, the management expects the 2021 operating profit margin to improve to 2019 levels. They also have a medium term operating profit margin target of 21 to 22%. Management is very confident to achieve this target. They also have an ambitious average return of capital employed target ratio of 34%.  Risks to considerThe company has to comply with various environmental regulations. People are increasingly putting pressure on the homebuilders on environment concerns when developing the land. This could add more cost to the company and might delay the company’s future projects. The discretionary spending of some people has come down due to Covid-19. The job market might take a couple of years to improve and a lot of businesses have shut down in the last year. If the economic recovery takes a longer time than expected it could put a dent on the company’s long-term growth.Final view on Taylor Wimpey sharesThe low interest rate environment and government support should bode well for homebuilders. The company is fundamentally strong. However, the last year’s revenue drop is more than its competitors. So I would like to keep the company in the watch list and I am not a buyer of the stock today.  Taylor Wimpey shares: here’s what I’d like to do Simply click below to discover how you can take advantage of this.center_img Our 6 ‘Best Buys Now’ Shares “This Stock Could Be Like Buying Amazon in 1997” Image source: Getty Images. Royston Roche has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. 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