Redrow (RDW) managed to better withstand falling margins in the housebuilding sector than most of its peers during the past 12 months. Its ability to keep a tight rein on costs means it should continue to show resilience, while modest growth and an attractive yield are forecast. True, Redrow’s margins are a bit lower than some of its rivals’,but given the headwinds housebuilders face, we think investors should be willing to put a higher price on resilience. We therefore see attractions in the discount Redrow’s shares trade at compared with the sector average
IC TIP:
Buy
at
608p
Tip style
Income
Risk rating
High
Timescale
Medium Term
Bull points
Solid cash position
Valuation attractive relative to peers
Generous dividends
Margins relatively resilient
Bear points
Sluggish house price inflation
Exposure to London