Related Articles
The performance of the Taylor Wimpey plc (LON:TW) (TW.L) share price over the last few weeks has been somewhat surprising in my view.
It has edged higher at the same time as Brexit concerns have heightened among some investors. With it being highly dependent on the performance of the UK economy during what could be a period of disruption, a share price rise is not something I had expected.
Still, I think that Taylor Wimpey and sector peers such as Persimmon plc (LON:PSN) (PSN.L) could deliver improving financial performances in the long run. Demand for housing is expected to rise due in part to population growth, while the supply of new homes is unlikely to increase at a pace that is fast enough in my opinion.
With the Taylor Wimpey and Persimmon share prices trading on P/E ratios of around 7, I think they offer large margins of safety. And with Persimmon having potential challenges with customer satisfaction levels, I think Taylor Wimpey could offer a better investment outlook.
Other cheap shares in the FTSE 350 include Royal Mail PLC (LON:RMG) (RMG.L) and Aviva plc (LON:AV) (AV.L).
Royal Mail’s P/E ratio of less than 6 shows that investors are downbeat about its performance. Although I think the company’s international growth prospects are bright over the long run, I’m anticipating further share price volatility for Royal Mail in the short run.
Aviva’s P/E ratio of 6.5 indicates that it offers good value for money in my view. Its 7%+ dividend yield, plans to reduce debt and its growth potential in fast-growing markets could mean that it is able to deliver improving share price performances in my opinion.
Therefore, while I think Taylor Wimpey has investment appeal, I believe that Aviva’s strong position in key markets and its overall strategy under a new CEO could mean that it offers a relatively appealing risk to reward ratio. Over the long run I believe the stock could outperform the wider FTSE 100.
Source link
