Picture supply: Getty Photographs
I believe Taylor Wimpey (LSE: TW.) could possibly be among the finest FTSE 100 shares to think about shopping for in a downturn. The share worth is down 24% up to now 5 years, and we’re taking a look at a 5% fall to this point in 2025.
However the slide has pushed the forecast dividend yield up as excessive as 8.1%, in step with the payout for 2024.
Demand returning?
The 12 months to December 2024 noticed falls in construct completions and common promoting costs. However they had been solely modest dips, in step with expectations. And contemplating the rate of interest stress on residence shopping for, I appreciated what I noticed.
At outcomes time the present 12 months had began out properly. The non-public internet gross sales charge was up 12% to 0.75 per outlet per week. The corporate famous “some incremental enchancment in market pricing“.
On the destructive facet, we had been informed that “we now have begun to see modest construct value inflation and we count on this to be low single digit for the 12 months“.
The ending of stamp responsibility aid, and discount in rate of interest lower expectations, might nonetheless harm. And I believe sentiment might stay bitter for a while but. However I’m contemplating shopping for some alongside my Persimmon holding.
Insurance coverage cycle
I charge the insurance coverage sector as needing the longest of long-term investing horizons. It actually will be very unstable, and the short-term ups and downs will be extreme. However what higher time to consider shopping for Authorized & Normal (LSE: LGEN) then when the ahead dividend yield’s as much as 9%?
We’ve seen a 28% share worth rise up to now 5 years. Nevertheless it’s been falling since 2022, and over the previous 10 years the inventory’s been flat.
Authorized & Normal’s in a really aggressive enterprise. And together with the entire monetary sector, it’s on the sharp finish of hazard from financial stress. We’ve actually seen loads of that in latest weeks, and I count on an entire load extra.
I actually do assume the share worth might nonetheless have a really rocky experience forward of it, at the very least within the shorter time period. However that is one other favorite sector of mine, having purchased Aviva shares some years in the past. I’m considering of including some Authorized & Normal.
Danger settling?
I charge WPP (LSE: WPP) as most likely the riskiest of the three I’m taking a look at right now. The media company has fallen from its former glory underneath founder Sir Martin Sorrell. And it’s been out of favour with traders since his controversial departure in 2018. The inventory hunch since then means the WPP share worth is again to the place it was in the beginning of the present century.
However that does transfer the anticipated dividend yield as much as 7%. And the ahead price-to-earnings (P/E) ratio’s down underneath 9. In a primary quarter buying and selling replace Friday (25 April), the corporate reiterated its full-year steerage.
Talking of commerce battle fears, the replace stated: “Whereas WPP isn’t itself immediately affected by tariffs, they are going to affect various our shoppers.” However to this point, the agency has “not seen any important change in consumer spending“.
Am I being rash to take a look at shopping for WPP now, with the financial outlook so shaky? Maybe, however I’m positively contemplating it.
