Are they worth buying for my ISA? Let’s take a look at the set-up ahead of the tournament.

A revenue booster

The World Cup should be a nice little revenue booster for ITV, because this event tends to lead to an increase in advertising revenues.

The company’s certainly expecting to see advertising revenues rise in the months ahead. In its most recent trading update (14 May), it said that it expects total advertising revenues (TAR) growth to be around 10% in the second quarter of 2026.

It also expects a strong July. So Q3 growth could be decent as well.

It’s worth noting that ITV Media rolled out a rare three-tier structured sales window ahead of the tournament to lock in upfront commitments from major brands. Some companies that are likely to be advertising heavily throughout the tournament include M&S, Chase, and Google.

How are the longer-term prospects?

Of course, it goes without saying that the tournament’s only going to provide a temporary boost to revenues. So what do the company’s prospects look like in the medium and long term?

Well, this is where things are a little mixed. On one hand, ITV Studios – which produces content – has solid prospects. It’s making shows for other platforms (eg Netflix, Disney+) and having success today.

On the other hand, the company’s Media & Entertainment business could struggle. Because these days, people are not spending a lot of time watching regular TV. Instead, they’re watching Netflix, YouTube, and other streaming services.

It’s worth noting that while analysts expect group revenue growth of about 3.6% this year (boosted by the World Cup), they only expect top-line growth of around 1% next year. I find it hard to get excited about this level of growth (especially when there are so many companies growing at 20% a year or more).

Should I buy?

Now, this doesn’t mean the shares aren’t worth considering. They do look relatively cheap today – the price-to-earnings (P/E) ratio is only around 10.

Meanwhile, there’s a chunky dividend yield on offer. With analysts expecting dividend payments of 5p per share for 2026, the yield’s a little over 6% at the moment so the shares could be a decent source of passive income.

With the average analyst 12-month price target sitting at 83p however (roughly where the share price is today), I just feel there are better opportunities for me in the market right now. While this stock could provide solid returns from here with its larger-than-average dividends, I see more potential in other names.

Should you invest £5,000 in ITV right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if ITV made the list?

Edward Sheldon does not hold any positions in the companies mentioned

The post Should I buy ITV shares for my ISA ahead of the World Cup? appeared first on The Twelfth Magpie.

But some investors may not be satisfied with a yield of around 3%. And, I understand why…

With a £20,000 investment, a portfolio yielding 3% would only generate £600 per year.

However, it’s possible to find high-quality dividend stocks with much higher dividend payouts. For example, if an investor’s portfolio yields 7%, they would make £1,400 a year. That’s an extra £800 a year!

Here are two UK shares that could help to achieve just that.

The highest yield in the FSTE 100

Legal & General (LSE:LGEN) shares have a dividend yield of 8.1%, which is currently the highest in the Footsie.

There’s plenty I like about the company aside from this. Most notable is how I think current demographic shifts could be highly beneficial to the insurance firm in the long run.

While an ageing population won’t necessarily have a positive effect on the UK economy as a whole, it could mean that there’s higher demand for retirement services.

In fact, by 2034, pensioners are expected to account for a fifth of the UK population. This could make the retirement industry boom.

What’s great for Legal & General is that this is its most profitable area. It saw operating income from retirement services climb by 6.5% in 2025, and I think this will soar over the next decade.

Its shares don’t come without risk, given its status as a financial services firm. If the global economy is in trouble, the firm may find itself in trouble as well. This isn’t out of the question either, as the OECD forecasts some countries falling into a recession if the Iran war drags into 2027.

That said, £20,000 put into its shares today could make investors £1,624 a year, which is roughly £135 a month. Dividends aren’t guaranteed, but I think this will only grow as the company’s earnings do.

Its shares are definitely worth looking into further. However, a diversified portfolio may be better, so let’s look at the next UK share.

An overlooked opportunity?

With a yield of 6.1%, ITV (LSE:ITV) shares may be an overlooked dividend opportunity.

There are some very real concerns about whether the broadcaster has a future in the world of streaming. This is a very competitive space, and there’s no guarantee that it will be successful.

But these concerns have pushed the firm’s valuation down, as its shares only trade at a forward price-to-earnings ratio of 9.2.

A combination of a high yield and low valuation is enticing. The fact that it has turnaround potential makes it even more worthwhile for investors to consider looking into its shares further.

And, it looks like there are some promising signs on the turnaround front. ITV Studios’ total organic revenue growth was 3% in the first quarter of 2026. Total streaming hours also increased by a very impressive 13% to 692m hours in the period.

Overall, I think both Legal & General and ITV represent compelling passive income opportunities for investors to explore further, and combined, average a 7% yield. But I don’t think they are the only opportunities…

Should you invest £5,000 in ITV right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if ITV made the list?

Muhammad Cheema does not hold any positions in the companies mentioned.

The post With dividend yields averaging above 7%, are these 2 UK shares worth considering? appeared first on The Twelfth Magpie.

These returns are always easier to build when a stock offers resilience and a business model capable of supporting dependable long‑term payouts. And ITV (LSE: ITV) fits that brief far better than the market appears to realise, given its present price.

So what sort of annual dividend income could investors be looking at?

On a rising trend?

From 2022 to 2025, ITV has paid a yearly dividend of 5p a share. The results has been respective average annual dividend yields of 6.7%, 7.9%, 6.8%, and 6.1%.

That said, these payouts can go down and up over time. As of now, the stock is yielding 6.2% — double the current FTSE 100 average of 3.1%.

However, analysts forecast it will raise its dividend to 5.01p this year, 5.06p next year, and 5.27p in 2028. These payouts would produce annual dividend yields of 6.3%, 6.4%, and 6.6%. This latter figure is nearly double the present 3.4% average of the stock’s home index — the FTSE 250.

How much yearly dividend income?

Using the 6.6% forecast as an average, a £20,000 holding in ITV would make £18,626 after 10 years and £124,071 after 30 years.

The figures assume that dividend compounding is used, which means reinvesting the dividends paid back into the stock. This process has an extraordinary turbocharging effect on returns over time.

At the end of the 30 years, the holding’s total value (including the original £20,000 stake) would be £144,071. And this would deliver a yearly income from dividends alone of £9,509!

Is this supported by the core business?

But dividend projections only hold water if the underlying business is generating the strength and stability needed to support them over time.

A risk to ITV is the continued fragility of the UK advertising market. Another is the rising cost and competitive intensity of premium content production. These can squeeze margins, especially if global demand softens or if ITV Studios faces delays in green‑lighting new projects.

Nevertheless, analysts forecast that ITV’s profits will rise by an average of 6.2% a year to end-2028, at least. That said, the firm’s latest full-year 2025 results indicate this might be an underestimate.

Statutory operating profit jumped 14% year on year to £363m. It underlined the benefit of tight cost control and stronger Studios deliveries to global streaming platforms. Meanwhile, total digital revenue climbed 10% to £614m, reflecting double‑digit growth in digital advertising and the continued expansion of ITVX’s viewing base.

And ITV Studios revenue increased 5% to £2.13bn. This illustrated the strength of its diversified global production model and rising demand for high‑end scripted content.

My investment view

ITV’s resilient underlying earnings momentum reflects a business that can continue to support cash generation and a stable dividend profile. And this steady cash generation, disciplined cost control and growing digital footprint give it multiple levers to expand shareholder returns.

Consequently, I think it well worth the attention of savvy, long-term investors looking for a second income.

I already hold several such stocks, with my attention instead having recently been focused on high-growth shares that look very undervalued to me.

Should you invest £5,000 in ITV right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if ITV made the list?

Simon Watkins does not hold any positions in the companies mentioned.

The post How much second income could investors target from £20,000 in this overlooked FTSE dividend gem? appeared first on The Twelfth Magpie.

One reason many people do not put their dream into action is a perception that it can take a lot of money to invest in the stock market.

In reality, though, as summer approaches and many people are eyeing the idea of weekend getaways that could cost a couple of hundred pounds or more, that same amount could be put to use as a way for someone to start buying shares.

Here’s what it takes

The money needs to be put somewhere where it can be practically put to that use. A share-dealing account or Stocks and Shares ISA should work for that.

A few hundred pounds is enough to diversify across multiple shares, a simple but important risk management strategy.

Before venturing into the stock market, someone should understand at least some key elements of how it works. A good business is not necessarily the same as a good investment, so learning how to think and act like a good investor is important

A small start, but a start

It is also important to be realistic about expectations.

When many people decide to start investing, they understandably focus on the excitement of what could happen.

In practice, though, what could happen and what actually ends up happening are not necessarily the same thing. It is important to avoid being unrealistic partly because that can lead people to take poorly considered risks.

If someone starts buying shares, learns along the way, and gains confidence to invest more over time, I think they could do better than if they get into something they do not properly understand and act rashly.

Here’s a share to think about

As an example of a share I think someone who wants to start investing should consider, I can point to ITV (LSE: ITV).

Now, I said above that investors always need to be mindful of risks and that is true here.

ITV’s operating landscape has changed dramatically from the days when families all gathered around the goggle box in their living room. A far broader spectrum of entertainment options is now available, fragmenting the audience.

That poses a risk to ITV’s revenues and profits. But it also gives the FTSE 250 company some opportunities

The company has expanded its own digital offering substantially in recent years. It also has a studio rental and production business that means it can actually benefit from other content producers making shows.

The ITV share price is in pennies, 35% below where it stood five years ago.

But I think that undervalues the long-term prospects for the company. In addition to that, ITV offers a dividend yield of 6.1%. That could potentially mean ongoing passive income stream for shareholders, if the dividend is maintained.

The post Here’s how someone could start buying shares for the price of a weekend break appeared first on The Twelfth Magpie.

To achieve this, I’m trying to build a stock portfolio that contains high-quality dividend stocks.

According to the ONS, the current median salary in the UK for full-time employees is £39,039. Therefore, it makes sense to create a strategy that targets earning this income annually.

Let’s see how it’s possible for an investor to replace their job with a passive income machine.  

The passive income target

Now, let’s assume an investor was targeting a dividend yield of 5% in a diversified portfolio. If aiming to replace the median UK salary, that portfolio would need to be valued at £780,780.

However, I’m not sure many of you reading this have that much spare change to hand.

But I’m here to tell you some good news… you don’t need that much to start. An investor could instead aim to achieve this over time.

With a much more modest amount of £20,000 to start with (which is still a large sum of spare cash) and a small contribution of £125 a month, an investor could make £780,780 within 32 years.

This is assuming that both dividends and shares in the portfolio rise by 5% a year, and that the dividends are reinvested.

I appreciate that some of the additional income generated from the portfolio will be eroded away by inflation over that time. Investors should also note that dividends aren’t guaranteed.

But by investing in a stocks and shares ISA, the dividends earned in the portfolio would be tax-free income. Whereas, of course, you have to pay tax on your employment income.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Let’s now look at a UK share that could help an investor target this.

A juicy dividend yield!

ITV (LSE:ITV) shares currently sport a lovely dividend yield of 6.2%. This would be ideal for investors to consider buying for their portfolio, as it’s above the 5% target used in my example above.

The broadcaster faces some serious issues. Most notable is the competition it faces from streaming platforms. The way people are consuming TV is changing. More and more are watching platforms such as Netflix, instead of traditional broadcasters.

Because of this pessimism, the firm’s shares have struggled, pushing their valuation into bargain territory. Right now, it sports a forward price-to-earnings (P/E) ratio of 9.

However, while I acknowledge this risk, I think it’s a bit overblown. The company remains a staple in many households.

Furthermore, its own streaming platform, ITVX, has been quietly impressing in the streaming world. In 2025, total streaming hours increased 16% to 2.3bn. Monthly active users also increased 12% to 16.5m.

While ITV does face serious issues, this provides reasons to be optimistic for the company’s future.

Combined with a high dividend yield and cheap valuation, I think investors should consider buying ITV shares today.

The post How to invest £125 a month in UK shares to target a £39,039 annual passive income appeared first on The Twelfth Magpie.

Looking around, I can see a few of potential opportunities to consider in the UK market.

Turnaround candidate?

Broadcaster ITV (LSE: ITV) is arguably one example. Based on analyst projections, its shares currently change hands at a price-to-earnings (P/E) ratio of just under 10.

The trouble is that the performance of the share price over the long term leaves a lot to be desired. Anyone picking up the stock five years ago will have endured a 33% fall. Sure, dividends received over this period would have soothed the paper loss to some extent. But this is akin to treading water. It’s not a recipe for getting rich.

Can long-standing CEO Carolyn Mccall and her team turn things around? The sheer amount of competition ITV faces along with the structural decline in TV advertising suggests it will be tough. But more growth in its Studios division would certainly do no harm. I also wouldn’t rule out a takeover bid or two.

In the meantime, the stock offers a forecast yield of 6.3%.

Huge dividend yield

Price comparison websites provider MONY Group (LSE: MONY) is a second mid-cap value stock that catches the eye and may be worth further research. Like the broadcaster, its share price has been going down for some time now. We’re talking about a 14% fall in the last 12 months.

A lot of this seems to be fuelled by concerns over the £900m cap’s ability to grow. Yes, revenue is ticking up but this is not the sort of momentum that’s going to get investors busting a gut to buy. The large number of share sales by directors in March doesn’t bode well either.

All that said, MONY trades on a P/E of nine. That looks remarkably cheap considering the above-average margins it consistently posts. The launch of a new MoneySuperMarket Chat GPT app also shows how it’s leveraging artificial intelligence (AI) to enhance services for customers.

The passive income is worth mentioning too. At a chunky 7.6%, the forecast yield is over double that of the FTSE 250.

How cheap?

By contrast to the previous two stocks, JD Sports Fashion (LSE: JD) pays relatively little in dividends. So there won’t be much in the way of compensation for buyers if the shares keep falling in value. They’re already down nearly 20% in 2026 alone!

The outlook isn’t great either. With inflation on the rise due to the conflict between Iran and the US, it’s likely that shoppers will be looking to cut back (again) on discretionary purchases.

But I still think there’s a lot to like. JD’s ongoing growth strategy in the US is progressing well and now accounts for a significant amount of total revenue. The forthcoming footfball World Cup could also provide a boost to earnings (even during tough times) thanks to long-standing partnerships with key brands such as Nike and Adidas.

To cap things off, it’s also the cheapest of the three. The P/E here’s a little less than six! If/when sentiment improves, those brave enough to think about investing now could be rewarded.

The post P/E ratios of less than 10. Are these 3 FTSE value shares hot enough to consider buying now? appeared first on The Twelfth Magpie.

Several things, in my view. As I explain below, with the right approach, an ISA can end up providing some powerful passive income streams.

Why bother with an ISA?

Some passive income ideas are pretty whacky. Some are not passive at all, but involve a fair bit of work.

By contrast, investing in the shares of proven blue-chip companies that pay dividends from spare cash they generate can potentially provide income that is genuinely passive. I say “potentially” because dividends are never guaranteed. But by spreading the ISA across a range of different, carefully-chosen shares, I think that risk can be managed.

Still, that approach does not require an ISA. A simple share-dealing account or trading app would suffice. However, an advantage of a Stocks and Shares ISA is that dividends can pile up in it free of tax.

By taking a long-term approach, those can be reinvested (compounded) so that dividends can end up generating more dividends over time.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Five-figure passive income potential

As an example of how lucrative this could be, say that someone compounds their Stocks and Shares ISA at 7% annually. After 35 years, it ought to be big enough that a 7% dividend yield would equate to £14,947 a year of passive income.

That raises two questions though: why wait so long and is a 7% target realistic?

A long-term approach can pay rewards

Waiting 35 years gives compounding enough time to make a real financial impact. That is why the passive income is so impressive.

But it is not necessary to wait 35 years. The same approach could work on a much shorter (or longer) timeframe. However, the income earned would be correspondingly different, based on the timeframe.

Hunting for high-quality shares to buy

What about a 7% target compound annual growth rate and, later, dividend yield? (By the way, the difference is that the compound annual growth rate includes not only dividends but also any capital gain, less any capital losses). I see 7% as realistic.

One share I think investors should consider is ITV (LSE: ITV). It aims to pay out at least 5p per share in dividends annually. At the moment, the share sells for pennies, so its dividend yield is 6.1%. That means for every £100 invested, an investor will hopefully earn £6.10 annually in dividends.

On top of the income opportunity, I also see some potential for the ITV share price to grow over time. That would be a change from what we have seen in recent years. Over the past five years, the share has lost 31% of its value.

Such a fall reflects a risk that remains of concern: the impact of growing digital rivals and changing media consumption trends on a legacy broadcaster.

I recognise that as a risk. But ITV’s legacy business remains a strong foundation for its business, even if it is set to decline over time.

The company has been developing its digital business too. It also has a sizeable production business providing studio space and expertise. To me, the current share price undervalues the long-term value of that combination.

The post Here’s how a £20,000 Stocks and Shares ISA could one day generate £14,947 of passive income a year appeared first on The Twelfth Magpie.

The best way I have found of making money while I sleep is through dividends paid by shares. The only real effort on my part is to choose good stocks initially and then to monitor their progress periodically.

One share that caught my eye recently is terrestrial and digital media giant ITV (LSE: ITV).

Why this one?

For a start, the firm delivers a current dividend yield of 6.5% — way higher than the FTSE 100’s 3.1% or the FTSE 250’s 3.4%.

Better still is that analysts forecast this will rise to 7% by 2028.

So, investors considering a £20,000 holding would make £20,193 in dividends after 10 years and £142,330 after 30 years. This period is commonly seen as a standard investment cycle for long-term investors.

The numbers assume the same 7% forecast yield as an average, although this can go up and down. It also factors in the dividends being reinvested back into the stock to capture the turbocharging effect of ‘dividend compounding’. It is like allowing interest to grow in a savings account.

At the end of 30 years, the holding would be worth £162,330 (including the original £20,000 investment). And this would pay £11,363 every year in income from dividends.

A share price bonus too?

On top of that potential income stream, I think there could be share price profits too. This is because the current price of ITV is far below the ‘fair value’ of the stock. And over time, asset prices (including shares) tend to converge to this true value.

Discounted cash flow (DCF) analysis enables investors to pinpoint the price at which any stock should trade. It does this by projecting future cash flows for the underlying business and ‘discounting’ them back to today.

Some analysts’ DCF modelling is more bearish than mine, depending on the data used. However, based on my DCF assumptions — including an 8.2% discount rate — Vodafone shares are 27% undervalued at their current 77p price.

This implies a ‘fair value’ of around £1.05.

Given the gap here to its current price, this suggests a potentially terrific buying opportunity to consider today if those DCF assumptions hold.

My investment view

A risk here, in my view, is the sub-£1 share price, which adds price volatility to the value proposition. Aged over 50, I am in the latter part of my 30-year investment cycle and am looking to minimise risk. Another risk is the intense competition in its sector that may squeeze its margins.

However, for those younger than I or with less risk aversion, I think ITV looks a strong passive income play. It is starting from a high dividend yield base, and this is projected to rise to the key 7% level.

Why is this key for me? Because it effectively offers compensation for taking the additional risk in share investment over no risk at all. And the ‘risk-free rate’ (the 10-year UK gilt yield) is currently 4.8%.

Meanwhile, other high-yielding, deeply discounted shares have caught my eye in the last few days.

The post Here’s how investors can aim for £11,363 a year in passive income from £20,000 in this overlooked FTSE media gem appeared first on The Twelfth Magpie.

Let’s have a look at what that could mean for someone who is currently 35, has an empty ISA (or no ISA at all) and can spare £15 a day to put into one.

Keeping things simple

In this illustration, I will presume a 5% ‘dividend yield‘. Yield is what you earn from the shares in your ISA annually, expressed as a percentage of what they cost.

There can be a temptation – an understandable one, I feel – to plump for high-yielding shares. But as dividends are never guaranteed, and an unusually high yield can be a red flag that investors fear a cut.

That can happen even with low-yielding shares though, so in every case it is always important to look at the quality of a business. How sustainable does its dividend look, based on its likely future free cash flows?

Five percent is well above the FTSE 100 yield (currently 3.1%), but I do see it as realistic while sticking to proven blue-chip firms.

In my example I am presuming a 5% yield. Bear in mind that, in reality, dealing fees, commissions and other charges can eat into an ISA. So it makes good sense to compare some of the many available options when choosing one.

Income streams can grow over time

Putting £15 a day (£5,475 a year) into a Stocks and Shares ISA from 35 onwards, here are the likely passive income streams based on that 5% target yield.

At 45 – £2,737 a year, at 55 £5,475. a year and by 65, an annual passive income of £8,212.

Earning more income for the same contribution

It would be possible ultimately to earn bigger passive income streams doing exactly the same thing but with one change – initially reinvesting the dividends instead of taking them as passive income.

That is known as compounding. It can be a powerful force multiplier. If someone did that and started drawing the passive income at 45, it would be £3,443 at that point (and ought to keep growing even as they stop compounding, thanks to ongoing contributions).

Waiting until 55 should mean annual passive income of £9,051. For someone patient enough to wait until 65 to begin drawing the income, it should be a yearly total of £18,187.

Every investor’s different

Compounding might not be for everyone. Some investors are keen to start earning passive income immediately!

Either way, one share I think is worth considering for its income potential is broadcaster ITV (LSE: ITV). It aims to maintain its annual dividend per share at least as its current level. It currently has a juicy yield of 6.6%.

A key risk here is declining advertising revenue. In weak economic periods, advertisers tend to spend less. Digital proliferation is an ongoing risk to ITV’s ad revenue as well, due to its terrestrial footprint.

But ITV has been growing its digital offer. It has lots of content and advertiser relationships that can help. The company also has a large studios and production business, generating sizeable non-advertising related revenue streams.

The post Here’s how a 35-year-old putting £15 a day into an ISA could end up earning £18k+ of passive income annually! appeared first on The Twelfth Magpie.

Inside a Stocks and Shares ISA, this income would also be tax-free. So does this make ITV a no-brainer dividend share for my portfolio today? Let’s tune in and find out.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Consistent profits

Looking back, broadcaster and content producer ITV hasn’t been a great investment. It’s down roughly 38% in five years and almost 68% across a decade.

By contrast, Netflix‘s share price has surged around 86% and 853% over the same periods.

However, ITV’s share price has been flat since April 2022. And the dividend’s remained consistent, paying out 5p per share for four consecutive years.

While there’s no guarantee that run will continue, City analysts do expect the 5p dividend to be maintained this year and next. So while the ITV business isn’t growing much (it’s considered an ‘ex-growth stock’), it does consistently produce profits that tend to support regular dividends.

One unit could be sold

ITV said last month that it was still “actively engaged” in talks to sell its Media and Entertainment (M&E) division to Sky. That’s the broadcasting side made up of linear channels (ITV1, ITV2, etc) and streaming platform ITVX.

Reports suggest the unit could be sold for £1.6bn. If so, there could be a chunky special dividend paid to shareholders upon completion.

And if M&E is sold off, it would leave just the ITV Studios. This business creates, produces, and distributes TV shows globally for the likes of Netflix, Disney+, and Amazon, as well as ITV. 

Hit content includes Love Island, I’m a Celebrity…, Rivals, and Line of Duty. The Love Island franchise is now sold in 28 markets, and Love Island USA was the most watched streaming TV original season of 2025 across the pond.

Studios revenue rose 5% last year to £2.13bn, while adjusted EBITDA was £297m, generating a solid 13.9% margin. And the unit acquired the UK’s Moonage Pictures, which produces The Gentlemen for Netflix and Suspicious Minds for Disney+.

Management expects solid Studios revenue growth this year too.

Studios is interesting

However, if the broadcasting unit is sold, will the dividend yield still be high moving forward? I doubt it. After all, Studios is a growth business and these don’t tend to pay out high dividends. It will likely want to keep cash to snap up smaller production labels and retain talent to make scripted new dramas to licence to the big streamers.

Therefore, I might not be able to rely on the stock’s 6.5% yield.

On the flip side, the market might favourably re-value the remaining pure-play content business. It has diversified revenue streams, with 350 customers worldwide, and a low-risk production model where it only makes programmes once they’ve been commissioned.

By contrast, broadcasting can suffer from very lumpy ad revenue. This is the risk with ITV.

On reflection, I find the Studios business interesting, but not for income. It could be cheap from a sum-of-the-parts valuation perspective. Yet there’s ongoing uncertainty regarding M&E and the price it could be sold for. So ITV isn’t a stock I’m interested in buying right now.

The post With its 6.5% dividend yield, is ITV a buy for my Stocks and Shares ISA? appeared first on The Twelfth Magpie.