Despite this volatility, dividends have continued to flow into the pockets of shareholders. And right now, the stock offers an impressive 9.7% yield. If it can be maintained, this near-penny stock could prove to be a lucrative source of passive income for long-term investors.

So should investors be considering this business for their own portfolios?

A UK streaming opportunity

STV Group’s a Scottish multi-media enterprise with its own free-to-use streaming platform alongside a traditional broadcasting service, both supported by advertisements.

The group’s content includes a blend of scripted and unscripted shows, with its streaming platform drawing in over one million monthly active users. That makes it the largest streaming and broadcasting service in Scotland, controlling 19% of the market, versus Netflix‘s 13% and Sky’s 10%. And with management aiming to increase its viewership to over 1.5 million by 2026, the increase in eyeballs is expected to drive digital advertising revenue higher.

But if that’s the case, why has the stock been stuck on a downward trajectory over the last 12 months?

With a weak creative commissioning environment in the UK, lots of projects have been cancelled or delayed. As such, new programmes are taking longer to arrive on STV’s platform, making attracting and retaining audiences far more challenging.

This has ultimately culminated in a slowdown in lower advertising revenues and even a full-year profit warning, that’s understandably spooked investors.

Potential for a comeback?

The company’s scheduled to release its half-year results next week, giving investors a more detailed insight into what’s going on behind the scenes. However, it’s worth pointing out that despite the challenges, there’s some encouraging progress being made.

As previously mentioned, STV Group controls the lion’s share of the Scottish streaming market despite fierce competition. At the same time, management’s been finding areas to improve operational efficiency, positioning the group to benefit from improved profitability once market conditions improve.

That’s good news for dividend investors, given that shareholder payouts are ultimately driven by earnings and cash flow, not top-line expansion. What’s more, with delayed projects expected to resume in 2026, the headwinds the company’s facing may soon come to an end, allowing growth and potentially even the share price to bounce back.

The bottom line

With an almost double-digit dividend yield, it’s hard not to be tempted by STV Group shares today. However, the exact timing of when market conditions will improve remains a bit of a mystery. If the recovery takes too long, dividends may be adversely impacted, sending shares further in the wrong direction.

As such, I’m keeping STV Group on my watchlist for now. But with earnings just around the corner, investors may also want to keep tabs on this business for both its income and recovery potential.

The post Down 55%, this almost-penny stock has a 9.7% dividend yield! appeared first on The Motley Fool UK.

With low price-to-earnings (P/E) ratios and enormous dividend yields, here are three to think about that offer excellent value, in my opinion.

Investec

Investec‘s (LSE:INVP) the first of these low-cost shares I think deserve serious consideration. At 554.5p per share, it trades on a forward P/E ratio of 6.2 times. Its corresponding dividend yield’s 7.5%. Discover three cheap shares with high yields and long-term growth potential — including top picks from the FTSE 250 and small-cap markets.

Banks and asset managers like this have significant growth potential as demand for financial services grow. I also like this FTSE 250 company’s substantial exposure to South Africa as well as the UK — the former’s emerging market carries substantial growth potential as population sizes and wealth levels boom.

Finally, I’m impressed by Investec’s resilience despite tough market conditions. Sales jumped 7.8% in the last financial year (to March), breaching £1bn for the first time ever.

Be mindful though, that the company’s South African operations create risk as well as opportunity. More specifically, huge political uncertainty following last year’s general election could hamper future performance.

Card Factory

Investing in UK retail shares remains high risk in the near term as the economy splutters. Yet at 95.1p per share, I think this is reflected in Card Factory‘s (LSE:CARD) ultra-low P/E ratio of 5.9 times for this financial year.

On the one hand, the company operates in a highly mature industry, which may limit future earnings growth. But it’s rapidly expanding in international markets to give profits a shot in the arm. Last year, it entered the £70bn gifts and celebrations market in the US, with the $25m acquisition of Garven.

This week it also announced the £24m purchase of funkypigeon.com to boost its UK operations. With Card Factory on course to eliminate debt in the near future, more growth-boosting acquisitions could be coming, alongside share buybacks and more chunky dividends.

Speaking of which, the forward dividend yield here’s a hefty 6%.

STV

Commercial broadcaster STV (LSE:STVG) has struggled of late as poor economic conditions and higher interest rates have sapped advertising revenues. It cautioned this week that it had seen “a further deterioration in the commissioning and advertising markets towards the end of H1 and into H2“, indicating these risks remain in play.

It’s not surprising to see the company’s share price sink in the aftermath. But for long-term investors, I think this drop could represent an attractive dip-buying opportunity to think about.

STV’s quality Studios division’s likely to enjoy long-term growth as traditional broadcasters and global streaming companies scramble for content. By 2030, it’s planning for at least a quarter of production revenues to come from international markets as its expansion continues.

For me, STV’s one of the best cheap shares to consider in the small-cap space. It trades on a forward-looking earnings multiple of 5.2 times. The prospective dividend’s a market-beating 8.5% too, based on a current price of 135p per share.

The post P/Es of around 6 and 6%+ dividend yields! 3 cheap stocks to consider appeared first on The Motley Fool UK.

Here are three on my radar today. They trade on low price-to-earnings (P/E) ratios and carry dividend yields north of the 3% FTSE 250 average.

Bank of Georgia Group

Emerging market firm Bank of Georgia trades on a forward earnings multiple of 4.3 times and carries a juicy 8.6% dividend yield. This is the sort of irresistible all-round value I’m looking for.

Banks like this one face a tough time if the global economy keeps cooling. In this kind of environment, bad loans can spiral and it can be difficult to grow revenues

That said, I don’t think Bank of Georgia’s low valuation fairly reflects its huge long-term earnings potential. Low financial product penetration in Georgia and soaring GDP growth means demand for its retail banking services is tipped to boom. Adjusted pre-tax profit here rocketed almost 60% year on year in 2022.

The Renewables Infrastructure Group

I’m considering building my existing stake in green energy investor The Renewables Infrastructure Group, too. It trades on a forward P/E ratio of just 11.2 times and carries an 5.5% dividend yield.

The cost of constructing and maintaining wind and solar farms can be colossal. And this can take a big bite out of earnings. But over the long term, I’m still expecting profits here to soar as cleaner energy sources take over from dirty fossil fuels.

I also like this real estate investment trust (REIT) because of its growing exposure to battery storage assets. The volatile nature of renewable energy generation means the use of energy-storage devices is also set to soar in the coming decades.

STV Group

Traditional broadcasters like Scotland’s STV Group (LSE:STVG) face immense competition on a number of fronts. Streaming giants like Netflix and Amazon have eaten into their audience shares in recent years. They also face competition for views from other media like video games and the internet.

Yet I still think this FTSE 250 share is packed with investment potential. I’m predominantly attracted by its success in the fast-growing streaming segment where the number of registered users of its STV Player platform has just barged through the 5m barrier. This was a full year ahead of schedule.

Viewing figures for free-to-air specialists like STV could receive a boost in the short term, too, as people cut back on paid-for subscriptions. An autumn study from ScotPulse showed that 64% of Scots have either cut back, or intend to cut back, on video-on-demand (VOD) spending as the cost-of-living crisis endures.

The company trades on a P/E ratio of 8.8 times for 2023. It carries a 3.6% dividend yield as well. I think these numbers make it a brilliant value stock to buy right now.

The post 3 FTSE 250 bargain shares I’d buy with £3,000! appeared first on The Motley Fool UK.

Soaring expenditure in Britain specifically is what makes STV such an attractive pick, in my opinion. According to marketing strategists WARC: “The UK is on course to achieve the fastest ad trade recovery of any major European market this year, and one of the strongest growth rates across 100 global markets.”

I’m expecting STV to release more sunny financials on the back of this ad market recovery, providing the possibility of a sharp share price rebound. The company’s most recent trading update showed that “advertising trends continue to improve through 2021” and that total advertising revenues were up 32% year-on-year in the first half. Encouragingly, ad sales were also up 5% from the same period in 2019.

Streaming superstar

I don’t just think STV’s a top buy for the economic recovery over the short-to-medium term however. I believe the cheap UK share’s massive investment in the fast-growing ‘video on demand’ (VOD) segment isn’t baked into the current share price of 336p.

Its STV Player platform is the fastest-growing streaming service in Britain, with streams rising 94% year-on-year between January and June. The business just signed its largest-ever content deal to keep VOD viewers switched on too.

I think STV’s one of the best cheap UK shares to buy, despite the intense competitive threat from the likes of Netflix and Amazon’s Prime service and free platforms like BBC iPlayer. City analysts think earnings here will edge 2% higher in 2021 before growth accelerates to 12% next year.

Another cheap UK share on my radar

Bellway (LSE: BWY) appears to be another great bargain for growth and income, now and in the future. City brokers reckon earnings at the housebuilder will soar 117% in 2021 and then rise by an additional 8% next year. This leaves the FTSE 250 firm trading on a forward P/E ratio of just 10 times.

What’s more, at a current price of £35.20 per share, Bellway carries a forward dividend yield of 3.2%. It’s one that smashes the FTSE 250 average of 1.8% to matchwood.

Bellway’s shares have risen strongly over the past year as home sales have rocketed. Still, it continues to command a low valuation as fears over property demand as Stamp Duty is reintroduced persist. This is a real threat but as an investor in the housebuilding sector myself, I continue to find news on this front encouraging.

Latest Halifax data this week showed average home values rise 0.7% in August to fresh record peaks. This was despite Stamp Duty becoming payable again for all properties above £250,000.

I already own shares in Barratt and Taylor Wimpey. And while demand for its new-builds could suffer if the economic recovery stalls, I’m thinking of snapping up Bellway shares too due to its rock-bottom share price.

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ITV share price: reasons to be bullish 

Perhaps the biggest reason for me to remain bullish on ITV is that revenue should rebound over the rest of 2021. Encouragingly, this month’s full-year report included mention of “more positive trends in the advertising market in March and April“. Most of its programmes are also back in production. 

Should all go as planned, I can see ITV restarting dividends. This should be a further catalyst for the shares to keep climbing as income investors pile back in. Additional gains could come from the company re-entering the FTSE 100 only a few months after being forced out. Funds tracking the index will be forced to buy the stock whether they like it or not.  

Another opportunity?

ITV isn’t the only value play out there. Industry peer STV Group (LSE: STVG) could also benefit from an ongoing reversal in sentiment. The shares are already up nearly 70% since the end of August. 

Earlier this month, the small-cap said it had achieved a “better than expected” performance in 2020, even though revenue and pre-tax profits were significantly down on the year. On a more positive note, it said online viewing rose 68% over the period. In other news, STV Studios won a record 19 new commissions in 2020 and net debt, excluding lease liabilities, fell 53% to £17.5m. In addition to all this, its also confirmed that it would reinstate dividends.

The most important snippet for me, however, was that advertising trends were “improving materially” in 2021.

Reasons to be cautious

Although bullish on the ITV share price and STVG’s prospects for the rest of 2021, I’m conscious that owning shares in the former may be skewing my opinion. So, let’s look at a few arguments for why things might not go as I think.

One clear objection to continuing to hold either stock now is that people can’t wait to leave their sofas and venture back out. As such, viewing numbers could drop over the remainder of 2021, especially if we get decent summer weather.

Of course, a third wave of the coronavirus would be bad news too and may halt productions again. A related concern comes from the possibility that overseas travel may still be prohibited. If so, travel companies and airlines will be unwilling to spend on advertising. 

On top of this, the competition for viewers won’t get any easier for ITV. Yes, its Britbox service has been well received, but the number of subscriptions pales in comparison to US giants like Netflix and Disney. As mentioned last month, I’m a big fan of the latter.

Solid hold

I’m happy to continue holding my ITV shares. A forecast P/E ratio of 12 takes into account the above concerns, in my view. Meanwhile, STV trades on an even more attractive valuation of 10.5 times projected FY21 earnings. I’d buy with any spare cash.

As long as COVID-19 is eventually sent packing, I’m hopeful investors like me will be rewarded for not selling either too soon.

The post Why I think the ITV share price is only getting started appeared first on The Motley Fool UK.

Why I reckon STV is a FTSE share to buy now

And despite the coronavirus crisis, today’s full-year results report demonstrates progress towards that goal. However, the five-year financial and trading record shows advertising earnings have been patchy. There’s no escaping the large cyclical element in the business. On top of that, the sector is competitive. And the reason STV needs to diversify is to catch up with an audience that is migrating to digital channels leaving the traditional broadcasting operations behind. I see such trends as negatives regarding the case for investing in the shares now.

Nevertheless, today’s figures encourage me. Revenue dipped by 14% compared to the prior year. And adjusted earnings per share plunged 18%. But the net-debt number dropped by 53%. And the directors restored shareholder dividends, saying the move is “a measure of the Board’s confidence in STV’s future growth.”

In 2020, STV managed to generate a third of its operating profit from new revenue streams, so it’s well on the way to the 50% target. Digital revenue rose by 5%. And online viewing rose 68% with revenue via video-on-demand (VOD) lifting 12% during the year. However, total advertising revenue dropped by 10%.

The company also announced new content deals with Sony and eOne. And the studio division won 19 new commissions in the year, despite the pandemic. Meanwhile, in one measure of progress, audiences grew by 14% for STV broadcasting operations and by 83% on the STV Player.

Robust finances

The strong operational and financial performance enabled the company to pay back in full its furlough grant of £1.6m. Happily, STV is one of many publicly listed companies that have been sending coronavirus-related monies back to the nation’s coffers.

Adjusted operating profit came in “well ahead of initial expectations” at just over £18m. But that was still a year-on-year decline of 19%, although there was a “significant” improvement in the second half of the year.

Nevertheless, STV needed to strengthen its balance sheet in the summer of 2020 with a placing raising a gross sum of around £16m. And in early March, the company agreed to a new £60m revolving credit facility.

Looking ahead, the directors reckon the outlook for the business is positive and improving. And I see the stock as one with further to recover following the Covid crisis with the potential for further growth after that if the business can keep on winning digital market share. Although that outcome is not certain.

And I’m not expecting progress to shoot the lights out in the years ahead. STV has been struggling for several years. And the share price has essentially travelled nowhere in the past decade.

But I’m prepared to embrace the risks in the hope the firm will keep hold of its newly discovered growth mojo. With the share price near 335p, the forward-looking earnings multiple for 2021 is just over nine and the anticipated dividend yield is around 3.7%.

Given that forward growth will likely be quite slow, I see the valuation as fair rather than cheap.

The post I think this is one of the best FTSE shares to buy now appeared first on The Motley Fool UK.

#1: A bright UK e-retailing share

I think the booming e-commerce sector makes ASOS (LSE: ASC) one of the best UK shares to buy today. This particular fashion retailer offers a broad range of products and brands across many price points. And it trades across Europe and the US, giving it terrific strength through diversification. What’s more, by focusing on the 20-somethings demographic, it’s centred its operations on the most lucrative group in terms of fashion spending.

Now ASOS’s shares don’t come cheap. City analysts reckon the company’s earnings will rise 13% this fiscal year (to August 2021). This leaves it trading on a high forward price-to-earnings (P/E) ratio of 40 times. Such a vertiginous valuation leaves the stock in danger of a share price correction if trading begins to disappoint.

#2: A brickmaking beauty

British house prices continue soaring at a stratospheric pace as demand keeps on exceeding supply. This means housebuilding needs to pick up significantly in the years ahead. And this bodes well for UK brickmaking shares like Forterra (LSE: FORT).

The government has stepped up attempts to improve construction rates in recent years and homebuilding on these shores hit 33-year highs last year. It’s likely an overhaul of the planning system will help construction activity during the 2020s too.

City forecasts expect annual earnings at Forterra to soar 130% in 2021. Consequently, it trades on a forward price-to-earnings growth (PEG) ratio of 0.2. This sub-1 reading suggests the brick manufacturer could be wildly undervalued today.

Bear in mind though that estimates can miss to the downside as well as the upside. And this can pull share prices lower. Investors like me need to remember too that a bumpy economic recovery could damage demand for Forterra’s products in the short-to-medium term.

#3: A streaming great broadcaster

I also like the look of STV Group (LSE: STVG) right now. This is despite the broadcaster facing significant threats from the likes of Netflix and other major streaming companies, which I have to take into account when considering investing in this stock. The business has pumped huge amounts of money and plenty of effort into developing its own video-on-demand (VOD) capabilities. And this is paying off handsomely. Indeed, streaming via its STV Player platform soared 68% in 2020, faster than any other broadcaster’s VOD service. And the platform’s 12.5m streams in January was up 115% from the same month last year.

City analysts currently think STV’s annual earnings will rise 12% in 2021. As a result, the UK share trades on a forward PEG ratio of 0.9. I think this low valuation, coupled with a bulky 4% dividend yield, makes the broadcaster an attractive stock to buy today.

The post 3 of the best UK shares to buy now appeared first on The Motley Fool UK.

But tit-for-tat arguing over trade tariffs, ongoing Brexit-related chaos, and the added threat of political chaos in the US hasn’t done investor confidence a favour either.

Share market performance in 2020 could have been a lot worse had it not been for the strong performance of small-cap stocks since the spring. The FTSE 100 is down 13% since trading began on 1 January. The FTSE AIM All-Share index, meanwhile, is up 12%, soaring after the initial stock market crash.

Many professional investors reckon that small- and micro-cap stocks will continue outperforming larger UK shares as we move into 2021. So now could be a great time to buy as hopes of a strong rebound in the global economy grow.

2 too-cheap-to-miss UK shares

Here are a couple of small-cap shares I’m thinking of buying today. Let me explain why I’d buy them for my Stocks and Shares ISA for 2021 and hold them for 10 years at least:

#1: Trifast

Small-cap Trifast makes screws, bolts and fastenings for a huge number of applications. They can be found inside your washing machine, your laptop, your car, even your Covid-19 protective visor. This UK share’s broad exposure to a variety of cyclical sectors puts it in great shape to ride the economic recovery. And its massive geographic wingspan covering Europe, the US and Asia will let it ride the upturn to the maximum. Trifast is expected to return to earnings growth this fiscal year (to March 2021). And it trades on a low forward price-to-earnings growth (PEG) ratio of 0.8 for the rapidly-approaching new financial period. That’s supported by expectations of a 26% profits jump in 2021. And I’m excited by the company’s future profits opportunities as global car demand soars.

#2: STV Group

Broadcaster STV Group is in great shape to ride any economic recovery in 2021. History shows us that spending by advertisers recovers very quickly when conditions improve. And this is why City analysts reckon annual profits at this UK share will zoom 20% higher in 2021. But this small-cap isn’t just a brilliant buy for the here and now. I’m also encouraged by the huge investment it’s making in digital and video on demand (VOD), steps that should deliver robust long-term profits growth. Its STV Player service is the fastest-growing VOD platform in Britain today, with online viewing soaring more than 80% between January and October. Today, STV trades on a basement-level forward PEG rating of 0.4. It carries a monster dividend yield a shade below 5% too. This sort of value is hard to ignore.

The post I’d spend £5k on these 2 cheap UK shares in my ISA for 2021! appeared first on The Motley Fool UK.

There’s more than one way to skin a cat, it’s true. When it comes to share investing there’s many strategies that you and I can use to make a lot of money. One method that’s staring us all in the face today is the opportunity to buy top UK shares that were oversold during the initial stock market crash and which have suffered from anaemic buying interest since.

The success of Stocks and Shares ISA investors during the last decade illustrates just what a powerful ally stock market crashes can be for brave investors. Hundreds and hundreds of ISA owners made millions during the 2010s. How? They bought cheap UK shares in the aftermath of the banking crisis. And then watched them balloon in value as the economic recovery took hold and confidence returned to the markets.

Low P/E ratios AND big dividends

Here are two UK shares I’m thinking of buying for my own ISA. They carry low price-to-earnings (P/E) multiples which provide plenty of scope for serious price gains from now on. And they boast bulky dividend yields too. As a result I think they’re too good to miss:

• NWF Group has a very bright future. It is a major fuels supplier in a hugely-fragmented market. And through its aggressive acquisition strategy it’s taking steps to boost its geographical footprint and supercharge its share. It also has ample room to expand in the fast-growing animal feeds markets. The company’s forward earnings multiple of around 10 times fails to reflect its bright profits picture, in my book. At current prices, it boasts a 4% dividend yield as well. These figures suggest it’s a steal.
• Broadcasting colossus STV Group looks too cheap to miss today too. This UK share boasts a forward P/E ratio of 8 times as well as a near-4% dividend yield. Now could be an especially good time to buy as hopes of a strong rebound in ad budgets grow (former WPP head honcho Martin Sorrell, for one, recently told Barron’s that he expects a “full-throated” recovery in 2021). The accelerating growth of its digital business offers plenty for share investors to get excited about too.

Make a million with UK shares

These are just a couple of the too-cheap-t0-miss stocks available to buy today. The Motley Fool’s epic library of exclusive reports can help you find even more. So do some research and get investing in UK shares today, I say. You could get seriously rich and, like those ISA investors, possibly even make a million.

The post P/E ratios of 10 and 4% dividend yields! 2 UK shares I think could help you make a million appeared first on The Motley Fool UK.

The broadcaster, like its FTSE 100 cousin ITV, faces a significant drop-off in ad revenues during what will likely prove a painful and prolonged UK recession. Indeed, in March STV declared that previous guidance for regional ad sales to rise by single-digit percentages in 2020 looks “challenging”.

That’s likely to prove something of an understatement. However, STV’s variable broadcast cost base gives it some protection in these tough times. Programming costs account for the lion’s share of total costs. These are costs that tend to move in line with broader advertising revenues. This will help it defend margins in these difficult times.

Small cap, big value

But let’s look beyond the medium term. Like ITV, the Scottish broadcaster is benefitting from changing viewer habits and the move to online. It’s a reflection of the huge investment STV has made in its online capabilities, too. Online viewings of STV’s output surged 80% in the first quarter, picking up the pace from a blockbuster 2019 and helped by the broadcaster taking steps like releasing exclusive content through its streaming services and making its programmes available on new platforms like Apple TV.

This is a small cap that is clearly going places. And current troubles in the ad market represent nothing more than a mere bump in STV’s broader growth story. It currently trades on a forward price-to-earnings ratio of below 8 times, making it a brilliant value pick at current prices of around 240p per share.

Another one to watch

Tyman (LSE: TYMN) is another small cap that looks too cheap to miss today. It hasn’t had the best of things lately, as Covid-19-related lockdowns have smashed revenues (down 39% in April alone) and its factories in Europe have been shuttered. It also faces a slump in demand for its door and window components as a painful global recession will likely hammer construction companies across its territories.

Subsequent share price weakness means that, at current values of 195p per share it trades on a prospective P/E ratio of 10 times. I reckon this represents an attractive level to buy in at.

Tyman has been no stranger to difficult underlying market conditions in recent times. But it has shown that it is capable of outperforming the broader market. It has also proved successful in cutting costs. Both qualities should stand it in good stead for the coming recession.

This sales resilience also reflects Tyman’s active approach to M&A across its US, UK, and European territories in recent years. Its success on the acquisition front has boosted its product portfolio and its route to markets, not to mention building its presence in commercial markets along with boosting its existing position in the residential segment. Such investments should put it near the front of the queue when the upturn in its end markets finally transpires.

The post These 2 small-cap stocks are on sale! I’d buy them in an ISA today appeared first on The Motley Fool UK.