The London Stock Exchange is filled with tremendous income stocks. Yet while most investors focus on the income opportunities within the flagship FTSE 100, there’s a long list of smaller dividend-payers offering even more impressive yields.
Perhaps a perfect example of an income stock that most investors have never heard about is Reach (LSE:RCH). This little-known media conglomerate is actually the mastermind behind some of the most well-known publications in Britain, including the Daily Mirror, Daily Express, and Daily Star.
In total, it has over 100 websites and 30+ print titles in its portfolio, generating over 120m views each month. Combined, they generate a recurring revenue stream from both monthly subscriptions and advertisements. And yet, since the start of 2025, Reach shares have taken a 35% tumble, driving up the dividend yield to a staggering 11.9%.
So, is this secretly a buying opportunity for income investors?
The tumbling share price
Despite enjoying the benefits of established brands and a loyal audience, the company has encountered several challenges of late. Most notably is the ongoing and unsurprising downtrend of its print-based revenues, combined with the slowdown in digital advertising.
These factors have culminated in a 3.4% drop in revenue across the first half of 2025, with operating profit growth flatlining.
Management has cited a softer advertising market as the primary culprit behind the weak figures. But investors are concerned that the problems actually stem from rising competition. And the sudden announcement of Jim Mullen’s resignation as CEO earlier this year has only added more uncertainty to the mix.
With that in mind, it’s not so surprising that Reach shares have pulled back significantly. And yet, as an income stock, the business appears to still hold promise. At least, that’s what the decision to continue shareholder payouts despite the headwinds suggests.
Bull versus bear
Looking forward, there are several reasons to be bullish.
Under the new leadership of Piers North, Reach is continuing to execute its cost-saving initiatives that started in 2022, delivering another 4% reduction in operating expenses across the first six months of 2025. And following a recent trading update, the firm is on track to hit its full-year savings targets.
If management is correct that a soft market environment is responsible for the slowdown, then when conditions improve, Reach could be set to deliver an impressive rebound with much wider profit margins.
But of course, there are still some hurdles to overcome. The business carries a high level of debt & equivalents on its balance sheet, which limits its financial flexibility to reinvest in the business.
At the same time, while the company is migrating to a fully digital platform, it still relies on traditional print revenues for around a quarter of its cash flow. And with this revenue stream steadily declining, Reach could continue to face tough comparables if it can’t offset the decline with its digital content.
The bottom line
While this income stock offers an attractive yield. It comes with some notable risks. And some analysts have highlighted the potential for a payout cut if earnings performance doesn’t improve in the final quarter of 2025.
With that in mind, even with 11.9% dividends on offer, I think investors are better off looking elsewhere for income opportunities to consider.
