Canaccord reiterates 'buy' for Taylor Wimpey after dividend enhancements

Canaccord Genuity reiterated a ‘buy’ rating and target price of 210p for Taylor Wimpey on Tuesday after the housebuilder announced enhancements to its dividend policy.

Taylor Wimpey has increased its ordinary dividend to around 5% of net assets to be paid through the cycle from 2017 and announced a special dividend of £300m to be paid in July 2017.

The group also raised its guidance on operating profit margins to 22% between 2016 and 2018, compared to 20.3% in 2015.

Last month the company said its trading had not been affecting by uncertainty surrounding the 23 June European Union referendum.

Canaccord said: “Comments on current trading are consistent with what we recently heard from the group. Overall core principles of the group's strategy remain, with the group committed to driving further operational improvement.

“Over the next 14 months the shares offer dividends per share of c.22.5p - which implies a c.12% yield.”