Persimmon, Barratt Developments and Berkeley offer the best opportunities for dividends within the housebuilding sector, according to broker Jefferies, with more special payouts a possibility.
Persimmon already offers a copper-bottomed 8.5% yield, says the broker and going back to previous levels might see it generate a 2-year yield of 21.2% and still leave a GBP700m net cash position.
Similarly, if Barratt returns net cash (after land creditors) the 2-year yield is 23.1% and although Berkeley might be more cautious in the short-term on Jefferies’s calculations yjr London-focused builder can yield 9% pa from summer 2024 for the following 10 years from its free cash flow.
Price targets for the trio are respectively Persimmon (3,690p), Barratt (868p) and Berkely (6,182p).
All are rated buys, though all the sector’s constituents are in favour with the US broker, which says across the sector it can see dividend yields of more than 10% by 2023.