Persimmon Builds UK Homes

The consumer cyclicals sector includes twenty-eight industries ranging from Advertising Agencies to Apparel, Autos, Broadcasting, Department Stores, Gambling, Leisure, Lodging, Packaging, Personal Services, Shoes, Restaurants, Rubber, Plastics, Textiles, and all such consumer aimed enterprises.

Today I'm reviewing another residential construction firm in the U.K.. It's a large-cap stock with market capital over $10 billion. Its name is Persimmon plc.  It's trading ticker symbol is PSMMY

Persimmon PLC, through its subsidiaries, is engaged in the housebuilding business in the United Kingdom. It trades under the brand names of Persimmon Homes, Charles Church, Westbury Partnerships and Space4.

Persimmon was founded in 1972 with headquarters in York, the Group operates from 30 regional offices throughout the UK.

I use three key data points gauge the value of any dividend equity or fund like Persimmon plc: 

(1) Price

(2) Dividends

(3) Returns

After those three, four more keys will finally unlock an equity or fund in which to invest.

However, it's the first three primary keys that best tell whether a company has made, is making, and will make money. 

PSMMY Price

Persimmon's price was $77.91 per share at yesterday's market close. A year ago its price was $55.61 for a gain of $22.30 per share.

Assuming Persimmon's price will trade between the range of $60 to $100 next year, its price could grow another $20.30 from $77.91 to $98.21 by April 2019. 

PSMMY Dividends

Persimmon's most recent annual dividend was $3.51 declared in March, and payable tomorrow, April 13. In addition, Persimmon declared a special dividend of $3.09 Match 27 to be paid July 17. 2018.

Those two payouts peg the annual amount at $6.60 for a yield of 8.5% at yesterday's $77.91 share price. 

Gains For PSMMY?

Adding the $6.60 estimated annual dividend to the $20.30 estimated year over year price gain makes a $26.90 projected gross annual gain, which will be reduced by the cost to trade these shares.  

$1,000.00 invested today at the $77.91 price buys 13 shares. 

A $10 broker fee paid half at purchase and half at sale costs about $0.77 per share

Subtracting that $0.77 brokerage cost from the estimated $26.90 gross gain leaves a net gain of $26.13 X 13 shares 

= $339.69

or a 33.5% net gain on a $1,012.83 investment.

Therefore, Persimmon plc (whose ticker symbol is PSMMY), now shows a possible 33.5% net gain including a 8.5% dividend yield. 

No analysts cover this stock. The current stock price is at the peak for the past five years charted by Y charts. The projected year over year price target at $98.21 may be more or less optimistic than the market will support.

Those forward-looking numbers were conjecture based on past year performance. The actual results remain to be seen. They could turn out to be far higher or lower. More study is required for you to determine if Persimmon plc is worth your time and money.

Disclaimer: For more information and to get a two-week free sample of my stock portfolios just click on this link. Click ...

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