Motleyfool 11 Nov brilliant bargain13 Nov 2015 19:47
Barratt Developments
Housebuilder Barratt Developments (LSE: BDEV) greeted the market with yet another bubbly trading update on Wednesday morning. The London firm advised that forward sales leapt 20.7% in the 19 weeks to November 8, to £2.5bn, while average net private reservations rose 12.5% to 261 per week.
Barratt advised that “there is good consumer demand for our homes across the country, supported by a positive economic backdrop.” And the business has vowed to take on additional 250 graduates, trainees and apprentices to meet rampant homebuyer appetite. Indeed, Barratt advised that completions during July-December are on course to surpass those of the same period in 2014 as demand outpaces supply.
The City expects this strong backdrop to deliver a total dividend of 30p per share in the 12 months to June 2016, yielding a massive 5.2%. Barratt has seen its share price tank in recent weeks thanks to concerns over future margins. But I believe these fears are vastly overcooked, making the business a brilliant bargain for both income and growth hunters.