Here's Taylor Wimpey's dividend forecast from 2024 to 2027

Are house builders now the ideal option for those seeking passive income? Returns across the sector look juicy and none more so than taylor Wimpey (LSE:TW), whose dividend outlook could look very tempting given the current dividend yield of 5.74%.

This is quite impressive after a 57% rise in share price since the end of last year. Add to that a government eager to start building, and we could have a recipe for a solid revenue return in the years to come.

a look

A prudent first step when analyzing any dividend stock is to take a quick look at the forecast. Remember that dividend yield is a retrospective measure and tells us what we would have gotten instead of what we will get.

The forecast also highlights the obstacles ahead thanks to the work of City analysts whose consensus gives us a pretty good idea of ​​what performance will be.

Just with those figures that, as I mentioned, are by no means guaranteed, you could expect a payout level of about 6% in the next few years. For those in the retirement portion of their investing journey, it's a good deal when most investors aim for a drawdown rate of 4% and often lower.

As for me, I'm still building up savings and have a few more years left to play, so that's not enough to buy it alone. I'd like to see some growth there too.

Any growth?

So what kind of growth story is there here? Taylor Wimpey will undoubtedly benefit from lower interest rates. The latest news from the Bank of England is to be expected. “gradual” courteous. That will make borrowing cheaper and people should take out more mortgages. House prices are also likely to rise, further fattening revenues and bottom lines.

But interest rates aren't exactly a surprise to markets. And if we look at a share price that hit a low of 88p in 2022 and is now rising to 163p, I'm afraid much of that benefit is already built in.

A more intriguing possibility is that a new government will go all out on housing construction. The lack of supply has been putting pressure on renters and those looking to buy, and one of the easiest ways to remedy this would be to relax regulations.

If those in power decide to make it easier for housebuilders like Taylor Wimpey, we may see a huge run for the sector, just as we did in the 2010s. That was a run where shares of Taylor Wimpey, in particular, went up about eight times in five years.

That's enough to keep an eye on the stock, although I feel comfortable enough with my exposure to the sector that I don't plan to buy as of right now.