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The first thing I look at when choosing a FTSE 100 dividend stock is the income it’s likely to pay me. Next, I look at its growth potential. If both look good, I’m in.
Last year, I looked at housebuilder Taylor Wimpey (LSE: TW), and decided it was likely to score on both fronts.
Like every major housebuilder, it was hit hard by the pandemic, when building sites were mothballed and supply chain problems marred the reopening.
The inflation shock then drove up interest and mortgage rates, hitting buyer demand, while forcing up the cost of labour and materials. This squeezed margins from both sides.
Taylor Wimpey is one of my favourite dividend stocks
Yet when I checked, Taylor Wimpey’s balance sheet looked pretty sound. It ended last year with modest net debt of just £126.8m, for example.
While it paused dividends at the start of the pandemic, along with many others,…
