Many thanks HE, much appreciated and very informative. I took the plunge with a reasonable amount of BVS, as you point out, I'm hoping the new broom when appointed will tighten up cost controls, completions and thereby hopefully EPS too.
Dividend cover is normally quoted as earnings after tax/ dividends paid (EPS/DPS will give same value). This is over 2 for BVS which is generally considered a relatively safe level. Below 1.5x would be a concern
Many investors prefer to check whether dividend is covered by cash flow, as profit and EPS numbers are often subject to many adjustments, one-offs etc and don't always present the true picture. It is harder to manipulate the cash flow numbers.
That is the historic cover- in terms of whether dividend is safe the question is will earnings & cash flow continue to exceed dividends. The forecast data can be found in the two links below which I understand compile data from multiple broker analyst forecasts. Digital Look give adjusted EPS for historic data 4-traders use unadjusted.
The BVS numbers suggest dividend will continue to be covered by earnings at ~2.
Broker forecasts are of course a more or less sophisticated guess and the further out the forecast the less confidence can be put in the numbers.
BVS has just lost the CEO who resigned following an unexpected warning about 2016 earnings being below expectations due to late completions. That should not be a major direct impact on the numbers but is an indication BVS have not been as tightly managed as some other builders. BVS has lower valuation because it has under-performed. If a new COE turns it around quickly, the shares may do well medium term, but that will take time and there is always some risk that the new boss will identify other historic issues and write-down some asset values on arrival
to make his performance look better in the future. If I was looking to invest in just one housebuilder - I think I'd go for PSN or TW which payer hgher dividends- although mainly as predefined capital return payments.
The big unknown is of course the housing market, the underlying economy, interest rates etc. Some have been warning the market is due for imminent collapse for several years- but the demand and house prices has continued to increase, the risks of a housing slowdown should be understood, the builders have become prone to big SP moves on newsflow- among the worst hit after the Brexit vote.
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