Since the start of the year, ITV (LSE: ITV) has outperformed the FTSE 250 index handily. While the index has moved up 5%, the ITV share price is 12% higher than it was at the beginning of 2025.
That leaves it on a price-to-earnings (P/E) ratio of nine. That looks potentially cheap, despite ITV’s volatile financial performance in recent years.
Could the share price move higher from here? I think it possibly could — and see ITV as a share for investors to consider.
Attractive dividend
For starters, there is the payout.
The company aims to maintain the dividend per share at its current level as a minimum – and perhaps grow it.
That is not guaranteed — no dividend ever is. Still, as management has repeatedly committed itself to this objective, I think it will try hard to deliver on it.
At the moment, the ITV dividend yield is 6.1%. I see that as attractive and one reason for investors to consider the share. Still, an attractive dividend does not answer the question of whether the ITV share price is too high, too low, or about right.
A changed operating environment
At its current share price, I think ITV offers investors potentially good value.
However, we have seen in the past that the company’s earnings can be volatile. The proliferation of digital broadcasting platforms has been both a threat and an opportunity for the company.
The reasons for it being a threat are obvious. Gone are the days when ITV and a couple of rivals had a virtual monopoly on television broadcasting in the UK, with millions sitting down to watch whatever it decided to air.
A far more fragmented audience has meant far fewer viewers for legacy media. In ITV’s case, that means that the historically lucrative advertising market has become more challenging.
Advertisers have a much wider range of options as to where to spend their money, while falling viewer numbers make it harder for the company to justify making the sort of pricey shows that could attract premium advertising rates.
Higher earnings potential
But ITV has not stood still. It has pushed aggressively into the digital world itself and this is now a key plank of its corporate strategy. It expects digital revenues next year to be at least £750m.
It also operates a sizeable studios business, offering filming space and production assistance to third parties. That has enabled it to benefit from the large number of other companies that want to make content.
If things go well, I think ITV could grow its earnings in years to come.
Long-term survivor
Along the way, it has to contend with challenges beyond digital growth.
One is a weak economy. That can reduce advertising spend, threatening revenues and profits for the company.
This, however, is where I think its strengths come into play.
ITV has many decades of experience navigating a cyclical advertising market, as well as adapting to changing viewer preferences. If it can keep doing that I believe this long-established broadcaster can continue to be very profitable.
