1 small-cap stock to consider buying for November and beyond

I like to hold one or two or three small cap stocks for their growth potential.

One that is very close to my heart at the moment is Henry Boot (LSE:BOOT), the UK-based land development, real estate investment, development and construction company. Because of the great name it is at least worth further attention!

All joking aside, I think the company’s prospects look interesting, so I’d like to dig a little deeper. For the record: Henry Boot can be found in the FTSE Smallcap Index and with a share price of around 230p, the market capitalization is around £311m.

Positive announcements

The stock began rising in April after declining in late spring 2022. Therefore, I am confident that this change in character of the stock is due to something material in the business.

In fact, there was some good news from the company in an April 16 announcement, and it looks like it has fueled the new uptrend.

The company announced the sale of 494 residential properties in Cambridge to (now) Barratt Developments Barratt Redrow). The sale closed in July and gave Henry Boot an internal rate of return of 15% per annum. So that was the conclusion of a reasonable investment for the company.

CEO Tim Roberts said at the time that the sale demonstrated this “Continuing demand” The company has been looking for its premium websites. It was “Particularly encouraging” Given the challenging market environment and lower transaction volumes, Roberts said.

It looks like the stock market has become bullish on the prospects for Henry Boot’s business. That could be the reason why the share price has risen.

Roberts believes the disposal highlights the company’s experience in obtaining planning permission for complex sites “Navigating you through an increasingly difficult planning system“. This capability allows the company to sell the properties to home builders.

The example gives a great insight into how the company makes a living. However, several positive announcements have since followed and an optimistic interim results report was presented on September 17th.

An encouraging forecast

One risk with stocks is that Henry Boot’s business is sensitive to general economic conditions. It is also influenced by sentiment across the real estate sector. So it’s one of those stocks that requires careful consideration and good timing from potential shareholders.

Still, the company’s September guidance statement is optimistic in tone. A strengthening economy and the prospect of a rate cut will likely help the company. So it could be a good time to focus on the stock.

Meanwhile, the dividend’s multi-year growth is robust, and the forward-looking yield for 2025 is around 3.6%.

I think this is an attractive shareholder income. So if I had money left over to invest now, I would do more research to consider a few stocks for November and beyond. If the economy and real estate market continue to improve, Henry Boot could be well positioned.