Yet Persimmon‘s (LSE:PSN) a share with a big yield worthy of serious consideration. Trading conditions are worse than they’ve been for years, causing the housebuilder to tumble in value. But has the market become far too pessimistic? I think so.

For transparency, I hold Persimmon’s shares in my Stocks and Shares ISA. Over five years it’s slumped 63% in value, leaving me with a nasty paper loss. But here’s the thing: over time, I’m expecting it to rebound. And in the meantime, investors can possibly lock in a mouth-watering dividend income.

How so?

Out of the FTSE 100’s big-hitting income shares, Persimmon’s been something of a mixed bag of late. Annual payouts were cut in 2023, to 60p per share in response to higher interest rates and slowing home sales. They’ve remained at that level since, leaving investors’ income vulnerable to inflation.

Yet on the plus side, this — combined with a sharp share price drop — still means those buying Persimmon shares have snared sky-high yields around and above 6%. To put this in context, the FTSE average has been much closer to 3%.

What makes Persimmon such a special share today is its dividends are tipped to start growing again, to:

• 62.23p per share in 2026.
• 66.46p next year.
• 69.48p in 2028.

Consequently, dividend yields range from 5.6% to an enormous 6.3% for the period.

Cash and cover

The question is, of course, how robust are these forecasts? And especially as stress grows in the UK housing market? Latest Zoopla data shows buyer demand down 15% year-on-year due to “the combination of political uncertainty and higher borrowing costs”.

Persimmon’s share price could fall further if this persists. But I’m confident it won’t impact the company’s dividends. Dividend cover ranges 1.6 and 1.7 for the next two years, below the ideal security benchmark of 2. Yet that cover is far from terrible, and besides, the housebuilder has a strong balance sheet it can utilise for near-term dividends.

Also, it has no debt and — as of last December — healthy net cash of £117m.

Is Persimmon a FTSE 100 share worth buying?

Importantly, Persimmon has so far avoided the broader housing market slowdown too, or at least that’s according to latest financials.

It said on 30 April that it had started the year well… with an improved private sales rate and an increase in average selling prices. “As a result, our private forward sales are up 7% on the prior year“, it added.

This is no accident, reflecting Persimmon’s focus on affordable homes. And this should support healthy earnings in the current part of the cycle.

Hargreaves Lansdown also notes that its homes “are typically priced around 19% below the newbuild national average, [meaning] sales tend to be more resilient in times of uncertainty“.

Though there’s risk, I think Persimmon should remain one of the FTSE 100’s best-paying dividend shares. And I expect its share price could rebound when market conditions improve.

It’s not the only passive income hero that’s caught my eye though…

What income stock do we like better than Persimmon Plc right now?

One of our Share Advisor analysts has just released a brand new stock report that we think is a must-read for any investor looking to try and generate potential income.

And the best bit is that you can see if for yourself, right now, absolutely free of charge!

No jargon. No hard sell. Just a clear look at an income share we think is worth your time.

Royston Wild owns shares in Persimmon.

The post Down 63% and yielding 6.3%! Is this FTSE 100 share a brilliant bargain? appeared first on The Twelfth Magpie.

If you know anything about housebuilding sector, you’ll know it’s had a terrible decade. The seeds of negativity were set after the financial crisis, when interest rates were slashed almost to zero and held there for years. That drove house prices to unaffordable levels, squeezing many first-time buyers out of the market.

Housebuilders were then on the frontline of a string of shocks, starting with Brexit in 2016. The post-pandemic inflationary crisis, which sent mortgage rates to the skies, and the scrapping of the Help to Buy scheme in 2023 further squeezed young buyers.

Why has this share done so badly?

As if that wasn’t enough, hikes to Employer’s National Insurance and the Minimum Wage drove up labour costs, and the post-Grenfell cladding forced builders to shell out hundreds of millions in fire safety measures.

There was a brief respite as the Covid ‘race for space’ and stamp duty cuts briefly fired up house prices. The Persimmon share price peaked at 3,160p in May 2021. Today, it’s around 1,134p. That’s a peak-to-trough drop of almost 65%. It may also be a buying opportunity.

Plenty of investors will baulk at buying such a troubled stock. They’re wise to be cautious. While it’s great to buy cheap shares, the recovery can take a lot longer than you might like. Persimmon, like the rest of the housebuilding sector, has been swimming against the tide for years.

I topped up my stake in FTSE 250 housebuilder Taylor Wimpey at the start of this year, because I expected the property market to go gangbusters as interest and mortgage rates continued to fall. The Iran war wrecked that. But there are signs that some kind of Middle East peace deal may hold, and oil supplies are getting through. The International Energy Agency has even talked of a glut in a year or two. Inflation could finally fall below 2% next year. A word of warning: I thought the same in January. Didn’t happen.

Is Persimmon still making money?

But I still think there’s an opportunity here for investors willing to accept some volatility. Despite its share price struggles, Persimmon remains a profitable company. Last year, pre-tax profits actually rose 13% to almost £446m, beating expectations of £440m.

That followed a couple of torrid years though:

• 2025 – £445.6m
• 2024 – £395.1m
• 2023 – £351.8m
• 2022 – £703.7m
• 2021 – £973.0m

Building houses in the UK isn’t easy, given planning restrictions, and despite government promises doesn’t look like getting any easier. The economy’s struggling, the cost-of-living crisis is far from over, and buyers are strapped for cash.

But with a forward price-to-earnings ratio of 11.1, and forecast yield of 5.51% for 2026, Persimmon’s starting to look exciting. I think it’s worth considering, for long-sighted investors who are up for the challenge.

Should you invest £5,000 in Persimmon Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Persimmon Plc made the list?

Harvey Jones owns shares in Taylor Wimpey.

The post This 5.5%-yielding income stock’s at a 13-year low and cheap to-boot! Time to consider buying? appeared first on The Twelfth Magpie.

FTSE 100 laggard

Granted, 2026 hasn’t been particularly kind to housebuilder Persimmon (LSE: PSN) or its investors. While the index has delivered a near-5% gain year-to-date, the company’s value has plummeted by almost a quarter.

The longer-term performance is even worse. Anyone buying in mid-2021 would now be looking at a paper loss of around 65%. As I type, the FTSE 100’s up 46% over the same period.

To some extent, this terrible ‘return’ isn’t surprising. The exceptionally low-interest-rate environment that buyers once enjoyed came to an end when the Bank of England was forced to tackle post-pandemic inflation. As rates went as high as 5.25%, just making ends meet became the number-one objective for most households.

Persimmon was always likely to suffer. Sure, rates have come down since. But it would be a stretch to say the housing market has been firing on all cylinders or that consumer confidence has returned.

Building costs also remain elevated and could push even higher. Worryingly, operating margins at the business in 2025 were already around half what they were in 2020.

Is Persimmon actually a bargain?

If all this makes it sound like an investment in Persimmon today would be silly, it’s worth thinking about the contrarian view.

Today, the stock trades on a price-to-earnings (P/E) ratio of 10. This makes it the cheapest among its peers, albeit by a slight margin. It’s also low relative to UK shares in general. Put another way, some of the aforementioned risks are already reflected in the price.

Then there’s the passive income on offer. A yield of 6% makes it among the most generous in the FTSE 100. For context, a £5,000 investment would generate £300 for the year.

Other attractions are the company’s sizeable land bank. This is something that will surely become more valuable as time goes on, providing long-term protection from inflation.

Let’s also not forget that the demand for new housing continues to outstrip supply. Political pressure to increase construction isn’t likely to go away either.

My verdict

There is, of course, a chance that trading will become more difficult in the months ahead as the full consequences of the Iran-US conflict become clearer. In such a situation, we could see another cut to the cash dished out to investors (payouts were slashed by 75% in 2022). So it’s important not to get too fixated on that above-average yield.

Half-year results in August should provide some guidance on the near-term outlook for dividends. On an optimistic note, Persimmon’s balance sheet looks pretty robust for a business in a cyclical sector.

But since we can’t know if/when the housing market will get its mojo back, spreading cash around the market rather than backing one or two horses still looks the prudent move.

The long-term tailwinds suggest this might be one stock to consider tucking away for a few years. However, I think I’ll wait to see what the next set of numbers looks like.

Should you invest £5,000 in Persimmon Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Persimmon Plc made the list?

Paul Summers has no position in any of the shares mentioned

The post Down 65% but yielding 6%! Is this FTSE 100 dividend stock an unmissable bargain? appeared first on The Twelfth Magpie.

Its disciplined approach to cash, land, and build rates has created a foundation for a sustainable, high-yield dividend profile.

And with buyer demand slowly returning, it offers the rare mix of dependable income today and recovery-driven growth tomorrow. That could mean share price gains to be had too.

So, what sort of returns could investors be eyeing here?

How much potential dividend income?

Dividend yields can go up and down, as annual dividends and share prices change. But analysts forecast that Persimmon’s dividend yield will rise to 5.8% this year, 6.3% next year, and 6.7% in 2028.

Using the projected 6.7% as an average, a £20,000 holding in the firm would make £19,012 in dividends after 10 years. That also assumes dividend compounding is used to turbocharge those payouts over time.

On the same basis, the payouts would increase to £128,434 after 30 years — the end of the standard long-term investment cycle.

The total value of the shares would be £148,434 by then (including the £20,000 initial investment). And that would deliver a yearly income of £9,945!

What about price gains?

A stock’s price is rarely the same as its true worth (‘fair value’). Price is just a short-term trading level, while value reflects long-term business fundamentals. It is critical to know the difference, as historically, share prices tend to converge to their fair value over time.

Discounted cash flow (DCF) analysis remains the gold standard for identifying fair value. It uses cash flow forecasts for the business and then discounts them back to today to produce a per-share price.

The less certain those forecasts, the greater the discount applied, and different assumptions here can produce varied analysts’ DCF outcomes. Using my own approach — including an 8.7% discount rate here — Persimmon looks 53% undervalued at its present £10.49 level.

That implies a fair value of £22.32.

So, if markets continue to correct this price-to-value gap over time, this could be a terrific buying opportunity, if that DCF modelling holds good.

How does it look under the bonnet?

The engine driving long-term dividend and share price gains is sustained profit growth.

A risk for Persimmon is mortgage rates staying higher for longer, which could stall the nascent housing recovery. Another is that build‑cost inflation may prove stickier than expected, which could squeeze the firm’s margins.

However, analysts forecast its profits will grow by a robust 11.7% a year on average to end-2028 at minimum.

Its 2025 results, released on 10 March this year, saw underlying operating profit jumping 17% year on year to £472m. At the same time, revenue climbed the same amount to £3.75bn. The figures reflect the firm’s ability to increase volumes and pricing even in a still‑fragile housing market.

My investment view

I already hold shares in another housing sector firm — Taylor Wimpey — so adding another would disrupt the risk/reward balance of my portfolio.

For investors without this problem, I think Persimmon’s strong projected profit growth will support forecast dividend rises. I also think it will power the firm’s stock price to its fair value over the long run.

That said, I have my eye on other high-yield undervalued stocks in other sectors.

Should you invest £5,000 in Persimmon Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Persimmon Plc made the list?

Simon Watkins owns shares in Taylor Wimpey.

The post A 6.7% forecast yield and 53% below ‘fair value’! 1 stunning FTSE income stock for investors to consider today? appeared first on The Twelfth Magpie.

That works out at £24,792 a year. Which is a pretty useful sum, especially if it’s on top of your State Pension, and maybe a workplace pension or two. Better still, that income’s tax free. As is the share price growth.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

The amount you need to save depends on the average dividend yield generated by your investments.

• At a 4% yield, an investor would need £619,800 invested.
• At a 5% yield, the required total falls to £495,840.
• At a 6% yield, the figure drops to £413,200.

How much do I need to invest each month?

Those are daunting targets, but 2066 is still 40 years away. Let’s say you tuck away £150 a month and bagged a return of 9.64% a year, with dividends reinvested. That’s the average yearly return on a Stocks and Shares ISA over the last decade, according to Unbiased. By the end of that, you’d have £792,219.

With a 5% yield, you’d actually have income of £39,611 a year, or £3,301 a month. It’s always good to aim high. Just remember that inflation will reduce the value of this income in real terms. Aim to increase you contributions every year, to counter it.

A diversified portfolio of FTSE 100 and FTSE 250 shares offering dividend income and capital growth could help you move closer to that goal.

One dividend stock I’d consider is Persimmon (LSE: PSN). Like most major UK housebuilders, its shares have endured a difficult few years. The Persimmon share price is down 20% over the last 12 months and 65% over five years.

Rival housebuilders have followed remarkably similar paths as higher interest rates, stretched affordability, rising costs and weaker demand hit the sector. The end of the Help to Buy scheme in 2023 was another blow, while the post-Grenfell cladding crisis added another layer of costs.

Yet Persimmon remains profitable. Last year, pre-tax profits rose 13% to £446m. Markets only expected £440m.

Is Persimmon good value?

The shares currently trade on a price-to-earnings ratio of 11.8, which doesn’t look excessive to me. If the US peace deal with Iran holds, that could cut inflation and mortgage rates. I don’t expect Persimmon to instantly benefit, but the outlook could brighten by the autumn.

However, investors often achieve their best returns by buying stocks before conditions fully improve. By the time recovery becomes obvious, the early opportunity may have gone.

Persimmon shares are forecast to yield a meaty 5.97% this year. That’s despite the board slashing the dividend by 75% to 60p a share in 2022, and holding it there since.

Persimmon is a stock I think is one to consider buying as part of a balanced ISA portfolio. I’d buy it, but already have exposure to the housing market recovery via Taylor Wimpey. Fingers crossed we get it soon.

Should you invest £5,000 in Persimmon Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Persimmon Plc made the list?

Harvey Jones owns shares in Taylor Wimpey.

The post How much do you need in an ISA to target a £2,066 monthly passive income in 2066 appeared first on The Twelfth Magpie.

But is there a catch? Let’s see.

Then and now

In 2025, Persimmon (LSE:PSN) – the housebuilder – reported earnings per share (EPS) of 99.6p and declared a dividend of 60p. Based on a current (13 June) share price of £10.60 it means the stock trades on a multiple of 10.6 times historic earnings and offers a yield of 5.7%.

In isolation, these numbers appear impressive. They suggest that, as a minimum, the stock offers good value. Indeed, some might argue that it’s a bit of a bargain.

But the group’s share price tanked following the pandemic and a cut to its dividend. Its shares have also taken a bit of a battering since the start of the current conflict in the Middle East.

In early 2020, Persimmon’s shares were changing hands for just over £30.50. It was about to announce EPS for 2019 of 269.1p and a full-year dividend of 235p. In other words, it had a P/E ratio of 11.3 and a yield of 7.7%.

What does it tell us?

Based on earnings, its suggests Persimmon offers some value but, in my opinion, it isn’t an amazing bargain.

If it was valued at 11.3 times its 2025 earnings, it would have a share price of £11.25, approximately 6% higher than it is today. Looking at analysts’ forecasts for 2027 (EPS of 120.2p), a price of £13.58 could be justified.

Even so, income investors are likely to be disappointed with the percentage drop in its yield.

But the group is being cautious with its dividend. In 2019, it returned 87.3% of its earnings to shareholders. For 2025, it was 60%. If it had the same payout ratio now, its yield would be higher than five years ago.

And despite the well-documented problems affecting the housing market over the past five years, a comparison of the group’s December 2019 and December 2025 balance sheets indicates it’s in better shape. Overall, its book value has increased by £356m (10.9%). Impressively, it still has no debt

My view

Investors – and the group itself – are clearly concerned that the green shoots of a recovery in the housing market that were starting to show earlier in the year could disappear again. The closure of the Strait of Hormuz is expected to increase inflation and lead to a rise in borrowing costs. This would be bad news for Persimmon. Not only would mortgages become more expensive but its margin could be squeezed.

However, the fundamentals of the housing market are likely to help the group. There’s an under-supply of new properties, which the government’s planning reforms are trying to address. Also, few are predicting the inflationary effects from the Iran war to be long-lasting.  

If Persimmon continued to pay a dividend of 5.7% — and the group’s share price reached £13.58 within the next 12 months — it would be an overall return of 32%. In my opinion, figures like these — along with the country’s chronic housing shortage — mean it could be a stock to consider for both capital growth and income.

Should you invest £5,000 in Persimmon Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Persimmon Plc made the list?

James Beard owns shares in Persimmon plc.

The post Down 31% in 4 months, could this now be a top stock to buy for growth and income? appeared first on The Twelfth Magpie.

You get upfront tax relief on SIPP contributions, which you don’t get with an ISA. And you can take 25% of your pot free of tax when you retire. After that, further withdrawals are taxable. But if you mix and match them with Stocks and Shares ISA withdrawals, which are tax-free, you have a handy way of limiting your overall exposure to HMRC.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

How can I build wealth for the future?

Let’s say an investor’s targeting a second income of £575 a month from their SIPP, which works out as £6,900 a year. The amount required depends on the yield generated by the portfolio:

• At a 4% yield, an investor would need £172,500 invested.
• At 5%, the required total falls to £138,000.
• Push the yield to 6% and the figure drops again to £115,000.

Higher dividend yields can carry higher risks. That’s why I prefer to focus on building a diversified portfolio rather than chasing the biggest payout available. Many FTSE 100 shares currently yield between 4% and 6%, making those targets look achievable over time. It’s possible to get 7% or 8%.

Is this housebuilder worth considering?

One dividend income stock I’d consider today is FTSE 100 housebuilder Persimmon (LSE: PSN). Like the rest of its sector, the shares have struggled lately. They’ve fallen 25% in the last year and are down 65% over five years. That’s a brutal decline by any standards.

Higher interest rates, stretched affordability and the end of government-backed Help to Buy scheme in 2023 hit the sector hard. The post-Grenfell cladding crisis added another layer of costs just as demand weakened, while the cost of labour and materials have climbed too.

Yet Persimmon remains profitable. Revenues climbed 17% to £3.8bn last year, while completions rose 12% to 11,905 homes. Average selling prices increased 4% to £278,203.

Analysts expect profits to improve again this year, although much depends on the wider economy and the direction of mortgage rates. The shares now trade on a price-to-earnings ratio of 10.5, which doesn’t look demanding to me.

Can the dividends keep flowing?

As well as share price recovery prospects, Persimmon offers an attractive 5.7% dividend yield. However, the full-year payout has been stuck at 60p a share for four years. That probably won’t improve while the housing market remains this fragile. And of course if inflation and mortgage rates continue to climb, property demand could fall.

On the other hand, Persimmon specialises in lower-cost homes and manufactures many of its own building materials. That gives it a cost advantage when conditions are tough. At some point, housing markets recover. They always have in the past.

Personally, I wouldn’t expect Persimmon shares to suddenly soar. But for investors seeking a combination of recovery potential and a generous yield, this is a stock worth considering. I’d be tempted, but I already have a sizeable stake in housebuilder Taylor Wimpey.

Should you invest £5,000 in Persimmon Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Persimmon Plc made the list?

Harvey Jones owns shares in Taylor Wimpey.

The post How much do you need in your SIPP to target a £575 monthly passive income? appeared first on The Twelfth Magpie.

Things are likely to get worse before they get better for many of these Footsie fallers. But for patient investors, I believe a lot of these shares could be brilliant recovery shares to consider.

Here are two that have caught my eye.

Dirt cheap

I already hold Persimmon (LSE:PSN) shares. If I didn’t, I’d look at opening a position in the housebuilder today. Its 19% share price fall over six months leaves it on a forward price-to-earnings (P/E) ratio of 10.4. Furthermore, the firm’s P/E-to-growth (PEG) is also inside bargain basement territory below 1 (0.7).

Times are tough for housebuilders as buyer demand dries up. UK construction output fell at the fastest pace in six years in May, S&P Global says, with the residential sector especially weak due to unfavourable market conditions and headwinds from elevated borrowing costs.

Yet in my view, the long-term outlook remains as strong as ever. Housing supply is extremely limited, and is worsened still by weak construction rates. When borrowing conditions improve, the current dip in building activity could give price growth — and with Persimmon’s profits — an extra boost.

The government believes 300,000 new homes are needed each year to meet the needs of Britain’s growing population. And Persimmon’s huge land bank puts it in great shape to capitalise on the eventual market recovery. Its reserve of 84,879 plots is equivalent to roughly seven years of supply.

Critically, around roughly 90% of this land bank has been earmarked for affordable homes too, a segment where the supply crunch is particularly severe.

Another FTSE bargain?

Sage Group‘s (LSE:SGE) a FTSE 100 share I’ve recently bought for my portfolio. Why? It’s slumped 18% in value over the last six months, providing me with an excellent opportunity to open a position.

The software giant’s shares have gained ground since I bought in. But they still offer excellent value, with a P/E ratio of just 19.2. That’s significantly below the 10-year average of 31-32.

Sage allows companies to simply manage a multitude of critical business functions. These include:

• Accounting.
• Payroll.
• Human resources.
• Enterprise resource planning (ERP).

Yet like other Software-as-a-Service (Saas) providers, its slumped in value due to rising AI risks. Investors are asking how much the Footsie firm’s profits will be impacted if firm’s switch to cheaper AI-based solutions.

It’s a good question. But in my view, these fears are hugely overblown. Sage’s services aren’t expensive, so the question is: to what extent will companies delegate critical processes to new AI agents just to save a few pounds? I’m unconvinced we’ll see a mass migration from reputable service providers.

Overall, I’m still expecting Sage’s profits to continue growing steadily as firms increasingly digitise their operations.

Should you invest £5,000 in Persimmon Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Persimmon Plc made the list?

Royston Wild owns shares in Persimmon and Sage.

The post 2 beaten-down FTSE 100 bargains I’m tipping to rebound! appeared first on The Twelfth Magpie.

But the UK’s housebuilders have struggled since the pandemic, with dividends being cut. However, are things about to get better? In particular, could Persimmon (LSE:PSN) be an excellent dividend stock for income investors to consider? Let’s see.

Then and now

As recently as its 2022 financial year, the housebuilder returned 235p a share to shareholders. In 2025, it declared 60p. This includes a final payout of 40p, which is due in July.

If this was repeated for 2026, based on a current (7 June) share price of 1,085p, it means 1,668 shares costing £18,097.80 would be needed to produce a second income of £1,000.80.

But the group’s most recent (30 April) trading update was upbeat. It said the year had started well with “an improved private sales rate and an increase in average selling prices”. At £2.46bn, its order book was 7% higher than at the same time a year earlier.

This suggests its profit could be higher than in 2025. Indeed, analysts’ consensus is for earning per share (EPS) to be 4.3% better in 2026. This is expected to result in an increased dividend of 65.57p (70% of earnings). If these forecasts prove to be correct, it means an investment of £16,557.10 (1,526 shares) would be needed to provide an income of £1,000.60.

And the position is expected to improve further in 2027. A dividend of 72.46p is forecast. This implies a forward yield of 6.8%.

What does this mean?

These forecasts suggest that someone investing £10,003.70 today (922 shares) could earn £1,641.12 in dividends — 178.03p a share (40p + 65.57p + 72.46p) — between now and July 2028. Looking at it another way, it means 16.4% of the initial investment could be recouped from dividends alone.

However, we should be cautious. As Persimmon has proven in recent years, dividends are never guaranteed. And although the conflict in Iran hasn’t had a material impact on the group so far this year, it warns: “We are mindful of its potential impact, including on consumer confidence, and there are early signs of increased inflationary pressure”.

Specifically, if interest rates stay higher for longer, the demand for new houses is likely to be affected.

But at the moment, the group appears to be going in the right direction. It has nearly 85,000 plots of land on which to build. And despite the post-Covid slump in the housing market, its balance sheet remains debt-free.

Encouragingly, its non-private business is proving resilient. The group’s described its interactions with institutional customers in both the affordable and build-to-rent sectors as “positive”.

An improving picture?

And in my opinion, if sentiment continues to improve, the dividend will be higher than that forecast. Due to its strong balance sheet and limited capital expenditure requirements, the group has historically returned nearly all of its earnings to shareholders. For example, in 2022, it paid a dividend equivalent to 95.8% of diluted EPS.

Personally, I think the stock’s worth considering by income investors, especially as Persimmon’s share price is currently 30% below its 52-week high.

Should you invest £5,000 in Persimmon Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Persimmon Plc made the list?

James Beard owns shares in Persimmon plc.

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Two of the biggest laggards are housebuilders Persimmon (LSE:PSN) and Vistry Group (LSE:VTY), which are down roughly 16.4% and 55.6% over the same period. Persimmon even started to stage a comeback in early 2026 before tumbling again in March.

So, what’s going on? Could these UK shares be gearing up for a stellar comeback, or are they value traps?

Why these builders are hurting

Both businesses have been battling the same brutal backdrop:

1. Higher mortgage rates.
2. Wobbly buyer confidence.
3. Political uncertainty.

Despite what the share price suggests, Persimmon has actually been delivering some decent numbers.

Full‑year 2025 revenue jumped to about £3.8bn, driven by a 12% rise in completions to 11,905 homes and a 4% increase in average selling prices. Profits beat market expectations, and early 2026 sales rates and forward orders are ahead of last year.

The snag? Higher financing costs, a big step-up in land spending, and concerns that margins are still a shadow of what they were a decade ago have all kept sentiment in check.

Vistry has its own issues: 2025 adjusted profit before tax edged up to around £269m, but revenue slipped 4%, and completions fell 9% as the market conditions remained tough. In fact, management has warned that 2026 margins will be lower on the back of targeting price cuts to spark higher interest from home buyers.

That profit warning saw the shares slump. And with Vistry shares now trading close to a 52-week low, it’s clear investor confidence has taken a hit.

But are these all just short-term problems?

Could a rebound be brewing?

Persimmon’s latest guidance points to a 2026 completions range of 12,000–12,500 alongside further profit progress. Although this is dependent on what happens with the Iran conflict and its impact on interest rates, as well as inflation.

Nevertheless, forward sales are up, build cost inflation currently looks more stable, and there’s still a structural shortage of housing in the UK, creating a powerful long-term tailwind.

Vistry’s story is more about strategy. It’s pivoting hard towards partnerships and affordable housing, where it works with housing associations and the public sector on long-term schemes. That model typically offers better visibility and less cyclicality than pure private sales.

The 2025 results showed margins improving in the second half, net debt falling, and a record £4.5bn forward order book as of March 2026 with a big chunk of 2026 units already sold. As such, management expects revenue, volumes, and profit to grow this year, even if margins dip in the short term while incentives do their job.

Are these UK shares worth buying?

Personally, I think both of these housebuilders are fascinating options for patient investors.

Persimmon looks like a quality cyclical opportunity – a strong brand, hefty land bank, and improving sales, that’s currently being held back by interest rates and buyer confidence.

Vistry feels more like a higher‑risk, higher‑reward turnaround, with its partnerships strategy and battered share price offering more upside if management executes well.

However, for me, neither is a slam‑dunk today. So for now, they’re staying on my watchlist.

Should you invest £5,000 in Persimmon Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Persimmon Plc made the list?

Zaven Boyrazian does not hold any positions in the companies mentioned.

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