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Can this 8%+ yielding FTSE 100 stock make you a million?

Today I want to look at two companies that have gone from market darlings to unloved laggards over the last three years.

However, although sentiment has soured towards these firms, neither has yet had to cut its dividend. As a result, they offer sky-high forecast dividend yields of 8.5% and 7.1% at the time of writing.

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Both companies are holdings in my income portfolio, but can either deliver the kind of big capital gains needed to help me make a million?

Direct route to growth?

Shares in FTSE 100 insurer Direct Line Insurance Group (LSE: DLG) doubled during the insurer’s first three years as a listed firm, between October 2012 and October 2015. But since then, the stock has been broadly flat.

Shareholders have enjoyed generous returns thanks to the group’s policy of returning surplus cash through additional special dividends. But tough competition in the motor insurance market, rising car repair costs and the mature nature of this business have made it hard for Direct Line to expand. The share price performance reflects this.

I recognise the headwinds facing the firm, but I remain a fan of its business model, where it sells directly to customers rather than through price comparison websites. In my opinion, this adds value to the Direct Line business. It creates a closer and more data-rich relationship with end customers, who seek the firm out rather than simply choosing the cheapest comparison quote.

Market forecasts suggest that earnings will fall by about 15% this year, before stabilising in 2020. In my view, the share price reflects this cautious outlook, with a forecast price/earnings ratio of 11.5 and an 8.4% dividend yield.

I don’t expect Direct Line to provide a fast track route to millionaire status, but I think the company’s proven track record of profitability and generous dividends could help me make a million slowly.

A changing picture

Broadcaster ITV (LSE: ITV) needs little introduction, but many television viewers don’t realise how many of the programmes on non-ITV channels are made by the group’s production business, ITV Studios. One recent example is the latest series of BBC hit Line of Duty.

Investors are worried about falling advertising revenues as viewers and adspend moves online. The group’s broadcast and online revenue fell by 7% to £489m during the first quarter, and total advertising revenue was also down 7%.

Further falls are a risk. But I believe the broadcaster is already making good progress repositioning to capture a growing share of the on-demand viewing market. Revenue from on-demand streaming rose by 22% during the first quarter, while the Studios business is also continuing to expand.

The company enjoys strong profitability, with an operating margin of about 18%. Debt remains fairly low and cash generation is good. This year’s forecast dividend of 7.9p per share looks safe to me.

ITV stock currently trades on 8.6 times forecast earnings, with an expected dividend yield of 7.1%. I believe that’s good value for such a profitable business. I may add to my holding over the coming weeks.

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Roland Head owns shares of Direct Line Insurance and 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.