Daily Stock Analysis: Persimmon PLC

Persimmon PLC is known by the ticker symbol PSMMF  and is listed in the consumer cyclical sector as a residential construction company. This is my first ever report on Persimmon PLC  for any of my portfolios.

Persimmon PLC is a British construction company that focuses on residential projects. One of the largest homebuilders in the United Kingdom, Persimmon focuses on traditional single-family homes, with up to 90% of its home sales in this market. 

The company mainly builds lower-priced residential homes, with around half of its constructed homes selling for under EUR 200,000. 

Image Source: Unsplash

It also participates in strategic land purchases around the United Kingdom for future housing development. The company annually completes over 10,000 homes.

The company offers family housing under the Persimmon Homes brand name; executive housing under the Charles Church brand; and social housing under the Westbury Partnerships brand name. It also provides broadband services. 

The company was founded in 1972 and is headquartered in York, the United Kingdom.

Three key data points gauge dividend equities or funds like Persimmon PLC (PSMMF):

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money. 

PSMMF Price

Persimmon's price per share was $40.82 as of yesterday's market close. One year ago its price was $36.00. So PSMMF share price has increased just about 13.4% in the past year. 

If Persimmon's stock trades in the range of $24.00 to $48.00 this next year, its recent $40.82 price might rise by $3.18 to reach $44.00 by August 26, 2022. My estimate is $0.30 under Persimmon's average annual price upside for the past 9 years.

PSMMF Dividends

Persimmon PLC's most recent regular semi-annual dividend payout of  $1.51 was paid August 13th. Their annual payout of $3.25 yields 7.96% based on yesterday's $40.82 closing price. Persimmon has paid variable semi-annual dividends 5 years.

PSMMF Returns

Adding the 3.25 annual Persimmon forward-looking dividend to my $3.18 price upside estimate shows a $6.43 potential gross gain, per share, to be reduced by any costs to trade PSMMF shares.  

At yesterday's $40.82 price per share, a little under $1000 would buy 24 shares.

A $10 broker fee (if charged) would be paid half at purchase and half at a sale and might cost us about $0.42 per share.

Subtract that maybe $0.42 brokerage cost from my estimated $6.43 gross gain per share results in a net gain of $6.01 X 24 shares = $144.24 for a 14.44% net gain on a $979.68 investment.

So it is that Persimmon PLC (PSMMF)  shows a possible 14.44% net gain including a 7.96% forward estimated dividend yield. 

Over the next year at this time, a $1000 investment in Persimmon PLC (PSMMF) could generate $79.60 in cash dividends alone. And a single share bought at yesterday's closing price was $40.82! Thus, PSMMF share price is 51.28% of the dividend income from $1K invested. So, according to my dogcatcher ideal, now is the time to pickup PSMMF  shares. The dividend from $1k invested is just under two times the single share price. Consider yourself alerted. 

All of the estimates above are speculation based on the past history of Persimmon PLC (PSMMF). Only time and money invested in this stock will determine its market value.

Disclaimer:  This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a ...

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