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Stockland Corporation Ltd, Mirvac Group and Lend Lease Group: revenues to rise from growing housing market

More signs that the housing market is driving home construction up were in the March quarter new home sales release from the Housing Industry Association (HIA). It reported a 5.8% increase in sales nationwide.

The top performing state was Queensland with a 20.8% gain in detached house sales with the original recovery drivers, Western Australia and New South Wales, still seeing increases. Detached house sales grew more than multi-unit dwellings.

Commercial and residential property developer Stockland Corporation Ltd (ASX: SGP) stated it expects to achieve 6% earnings per share growth in FY2014 and is on track for about 5,000 lots settling in the financial year.

In its third quarter update, it had 1,500 net deposits for lots, the best results year-to-date in four years. For FY2015, it plans to produce and settle over 6,000 lots, based on current demand.

It PE is 16.6 and the dividend yield is 6.2%.

Mirvac Group (ASX: MGR), a developer that does real estate investment and management, released its third quarter update last week, showing 606 lot settlements for the period and 1,638 year-to-date. It has raised its FY2014 target to 2,400 lots.

It reaffirmed its earlier FY2014 EPS guidance for 11.8 to 12.0 cents per stapled security, or about 8.3%- 10.1% growth on FY2013 earnings.

Infrastructure and property developer Lend Lease Group (ASX: LLC) announced that it will be able to start the third tower of its Barangaroo South development at Darling Harbour in Sydney.

It has signed on major tenants and although the tower is for commercial purposes, it caps off the three-tower project which will have residences, retail space, a six-star hotel and a VIP gaming venue operated by Crown Resorts Ltd (ASX: CWN).

Its share price is up about 22% in the last twelve months and has a dividend yield of 3.5%.

Foolish takeaway

Month by month the rise in building approvals, housing finance for new construction, and new home sales data make a clearer view of the amount of real estate development business that is in the pipeline. That gives more confidence in higher earnings forecasts.

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Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned. 

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