ITV‘s (LSE:ITV) currently offering a juicy 6.5% dividend yield. What this means is that I could invest £1,500 in the FTSE 250 stock and hope to receive almost £100 back in annual passive income.
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.
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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.
