Trevor Green, head of UK equities at Aviva Investors, explains why the asset manager is a top 15 shareholder in broadcaster ITV (ITV).
"There are unquestionably ever more channels and devices trying to seduce us away from watching TV programmes live in our sitting rooms, but even so ITV remains the market leader and channel of choice for advertisers when they want a mass audience," he says. "An evening's viewing on the channel shows the global blue-chip brands advertising.
"Investors should distance themselves from volatile monthly advertising data and look at the longer-term picture, where you can see a company that has delivered six consecutive years of double-digit growth. Additionally, ITV has announced a 10p special dividend in recent results which, when added to the ordinary dividend of 6p, gives a healthy 6.5 per cent yield. The business is therefore delivering decent top-line growth and offering an attractive yield.
"If you are of a longer-term persuasion, you will have appreciated the positive message the special dividend sends. This, along with the strong organic growth and the audience share improvement, has reassured that ITV's strategy remains on track to see a bounceback in growth.
"Looking forward, the company has a clear strategy to create world-class content on multiple channels internationally, and has been astutely picking up content businesses in recent years - the key ingredient for any network operator as it fights for viewers.
"ITV has wisely, for the most part, walked away from the extremely competitive bidding wars for sport. Instead, it has focused on mass-audience favourites such as Scott & Bailey, Grantchester and Mr Selfridge, which went out to over 100 countries.
"Investors should not underestimate the investment that ITV is directing towards ensuring it remains the first call the marketing director of a soap or car manufacturer makes when they want to launch a new product."
