Two dividend shares I like the look of are ITV (LSE: ITV) and City of London Investment Trust (LSE: CTY).
Here’s why I reckon investors should consider snapping up some too.
ITV
ITV has been around for many years, and is a firm telly favourite of mine personally.
The shares have seen better days. Over a 12-month period they’re down 10% from 82p at this time last year, to current levels of 73p.
A big part of this drop has been declining performance linked to advertising revenues being cut due to wider economic volatility.
Continued pressure and a lack of advertising revenue is a risk moving forward. It could put pressure on earnings, and in turn, return levels. I’ll be keeping an eye on this.
In addition to this, the rise of streaming giants and the way in which content is consumed is also an issue. Netflix, Amazon, Apple, and others, have all garnered a huge following and poured millions into creating excellent content. This has hurt more traditional players in the market. This continued shift could hurt ITV.
In the face of a changing world, ITV has also created its own digital streaming platform, ITVX. It’s gaining popularity, based on recent company updates.
Furthermore, the firm’s in-house production business – ITV Studios – continues to churn out smash hits such as I’m a Celebrity, as well as Love Island. This should help performance rise, and keep the dividends rolling.
Finally, a dividend yield of 6.7% is attractive.
I’m confident ITV will continue to innovate from a production point of view to keep returns flowing. Plus, when volatility subsides, advertising revenue could also come back into the picture.
City of London Investment Trust
Set up as an investment trust, pooled money is used to buy shares in blue-chip businesses across the UK index. The primary bulk of its holdings are in FTSE 100 stocks. The aim is to provide investors with consistent growth and returns.
Economic turbulence has held the shares back this past 12 months. They’re down marginally 3% from 420p at this time last year, to current levels of 404p.
I must admit the draw of investing in one stock to gain access to lots of top stocks with the sole aim of providing shareholder value is attractive.
Diversification is a great way to protect my investments. One stock in a certain industry doing well can offset a weaker stock in a poorly performing industry. I can get diversification automatically through this singular stock.
In addition to this, the shares offer a dividend yield of over 5% at present. This is higher than the FTSE 100 average of 3.9%. However, I’m conscious that dividends are never guaranteed.
From a bearish view, I am concerned that all the stocks are from the UK’s index. This means wider economic shocks can hurt returns and potentially growth. A prime example of this has been recent volatility.
Overall, the ability to buy one stock to access a number of the best across the UK index is too hard to ignore, along with a decent level of return.
