Sometimes the best time to buy a FTSE 100 dividend share is after it’s taken a beating. That allows you to get in at a lower valuation, and grab a higher yield too. So is housebuilder Persimmon (LSE: PSN) worth a look?
Builders have been battered across the board, due to high interest rates, stretched affordability, the slowing economy, and the end of the help to buy scheme in 2023. The cladding fire safety scandal made a bad situation worse, leaving builders paying hundreds of millions to put things right.
Why is this stock falling?
It adds up to a perfect storm and the damage is plain to see in the Persimmon share price. It’s plunged 17% over the last year, and 65% over five. In fact, it’s even worse than that.
At today’s price of 1,065p, Persimmon is trading at levels last seen in 2013. In 2021, the shares spiked past 3,000p, but it’s been a long way down since. So are we now looking at a generational buying opportunity, for brave investors willing to ride the investment cycle?
At some point, house builders will surely bounce back. But it’s hard to see it right now. The economy is slowing, mortgage rates are volatile, and the cost-of-living crisis is spooking buyers. Deutsche Bank has warned UK house prices could fall 5% over 2026. Good news for first-time buyers, bad news for Persimmon investors.
The group’s underlying pre-tax profits for the last five years show the direction of travel. 2023 was particularly tough, after the mini-Budget fiasco the previous autumn sent mortgage rates through the roof.
- 2025 – £445.6m
- 2024 – £395.1m
- 2023 – £351.8m
- 2022 – £703.7m
- 2021 – £973.0m
Things picked up in 2025, helped by a 17% jump in revenues to £3.8bn. Selling prices rose 4% to £278,203, and new home completions climbed 12% to 11,905.
The outlook for 2026 is better than I expected too, with forecasts suggesting pre-tax profits will grow 5% this year to £470m. Much depends on what happens in Iran though. This was supposed to be the year when interest rates fell and the housing market took off. Sadly, it was not to be.
Is Persimmon in deep value territory?
Persimmon’s homes tend to cost less than the market average, partly because it saves money by sourcing its own building materials, such as bricks, tiles, and timber. The lower pricing point helps maintain sales in tough times.
The trailing yield is a bumper 5.65% but is that sustainable? Unfortunately, the dividend per share has been frozen at 60p for the last four years. Given current market uncertainty, I’d be surprised if the board felt able to increase it this year. Yet markets are still pricing in a forward yield of 5.87% for 2026, rising to 6.34% in 2027.
Persimmon is in a tough spot, and I don’t expect the shares to suddenly go gangbusters. But given today’s low price and high yield, I think it’s worth considering with a long-term view. I’d like to pile in myself, but I already have exposure to the sector via Taylor Wimpey.
Should you invest £5,000 in Persimmon Plc right now?
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Harvey Jones owns shares in Taylor Wimpey.
