Even a stable FTSE 100 share with a powerful stability sheet, modest valuation, beneficiant yield and stable revenue outlook can take a beating, as housebuilder Taylor Wimpey (LSE: TW) is exhibiting us in the intervening time.

The Taylor Wimpey share price has slumped 17.73% during the last month. I maintain the inventory and I’m hurting. Over 12 months, it’s up simply 2.77%.

I purchased Taylor Wimpey shares on three events final 12 months, and for some time they have been bombing alongside. I used to be up greater than 40% and was getting a 7% yield on prime. Then the whole lot went fallacious.

Why are the shares crashing?

I went large on Taylor Wimpey as a result of I used to be impressed by the best way its stability sheet and share price remained comparatively stable all through the pandemic and cost-of-living disaster.

Whereas revenues inevitably dropped in 2020, they shortly snapped again. They dropped once more in 2023 however buyers held on within the hope that sooner or later inflation and rates of interest would observe, making mortgages so much cheaper.

On 7 November, the board backed its full-year 2024 outlook as demand and affordability improved. It anticipated to hit the higher finish of its goal of constructing 9,500 to 10,000 new houses, with working revenue in step with present market expectations of £416m.

That was down from £473.8m in 2023 amid fewer completions however the order ebook grew from £1.9bn to £2.2bn, excluding joint ventures.

But the Funds on 30 October harm. Chancellor Rachel Reeves’ determination to load £25bn value of additional nationwide insurance coverage contributions onto employers will squeeze Taylor Wimpey’s margins. They’re forecast to fall from 13.3% to 12% subsequent 12 months. A scarcity of expert labourers can also drive up wages.

Plus the Financial institution of England forecasts the Funds will drive inflation again up to three% in 2025, and mortgage lenders are mountaineering charges.

I’ll maintain for divided earnings and hope for development

US President-elect Donald Trump’s insurance policies are additionally anticipated to be inflationary, including to rate of interest considerations. Increased inflation can even push up Taylor Wimpey’s enter prices.

In one other improvement, Labour’s plans to construct 1.5m houses in 5 years are wanting a bit hopeful. Paradoxically which will help Taylor Wimpey, by limiting property provide at a time of sky-high demand.

The shares look affordable worth to me, buying and selling at 12.8 occasions earnings. This stays a terrific dividend earnings inventory. The 2024 yield is 7.34% and analysts anticipate this to hit 7.56% in 2025. Its monitor file is fairly stable, as this chart exhibits.

Chart by TradingView

The 16 analysts providing one-year share price forecasts have set a median goal of 167.65p. If that comes true, it’s up 29.32% from at this time. Which might be sensible.

Curiously, there isn’t that extensive a variety of suggestions. A powerful 12 name Taylor Wimpey a Sturdy Purchase, two a Purchase and two say Maintain. None suggests promoting. I’m definitely not contemplating it myself. I’d label it a Sturdy Purchase too.

If I didn’t have already got a giant stake, I’d take this chance to purchase extra with a long-term view. Britain wants homes, and I believe I want dividend development shares like Taylor Wimpey.