Why I’ve invested £3k in this high-dividend-yielding FTSE 100 stock

first_img Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! “This Stock Could Be Like Buying Amazon in 1997” Our 6 ‘Best Buys Now’ Shares Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Rupert Hargreaves owns shares in ITV. The Motley Fool UK has recommended ITV. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Enter Your Email Address See all posts by Rupert Hargreaves I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.center_img Simply click below to discover how you can take advantage of this. Rupert Hargreaves | Tuesday, 11th February, 2020 | More on: ITV There are only a handful of stocks in the FTSE 100 that currently support dividend yields of 6%, or more. One of these companies is the broadcaster ITV (LSE: ITV).Streaming giants Shares in ITV have come under pressure over the past few months due to concerns about the company’s ability to compete in the increasingly competitive online streaming environment.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Streaming giants in the US are ploughing tens of billions of dollars into producing content. ITV just can’t compete. In 2019 alone, Netflix spent a total of $14bn creating content. By comparison, ITV’s market capitalisation at the time of writing is just $7bn.These figures suggest the company has absolutely no chance of competing with the American giant.However, the UK-based group does have some strengths. For example, the Rugby World Cup helped to lift ITV’s advertising revenues in the third quarter.What’s more, ITV is the country’s largest free-to-air commercial broadcaster. This makes the business dependent on advertising revenue, which can be lumpy, but it also means the service is more accessible to consumers.Holding its ownDespite its size, ITV isn’t doing too badly. Advertising revenues rose by around 1% in the third quarter of 2019. Management expects it to be either flat, or 1% higher, in the final quarter.At the same time, the company is investing millions in building out its production business — this is where the value is.ITV Studios produces content for its parent station as well as other networks around the world. There are 60 different production labels under the ITV umbrella, giving the company a foothold in global media markets. Many of these programmes eventually go on to be shown on one of the streaming platforms.Another prong of ITV’s fightback is the recent launch with the BBC of its own streaming service, BritBox. This service already exists in the United States, so the company does have some experience managing an online streaming service. However, it’s unlikely this will become a significant part of the enterprise anytime soon, although it’s an extra source of income for the group. Income stockStill, while growth across the group might not be as impressive as it once was, ITV’s core business remains profitable and highly cash generative. That’s great news for income seekers.In its last financial year, the company reported a free cash flow of around £320m. That easily covered the £315m dividend cost.As such, it seems as if investors can trust the company’s 5.9% dividend yield. On top of this, the stock is trading at a price-to-earnings (P/E) ratio of 10.2.This suggests the stock offers a wide margin of safety at current levels. Indeed, most of the company’s international media peers command P/Es of 20 or more, implying the upside could be significant when sentiment towards ITV improves. Image source: Getty Images Why I’ve invested £3k in this high-dividend-yielding FTSE 100 stock I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.last_img read more