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A lot of the UK’s most popular shares are in the FTSE 100, but I think investors who overlook the FTSE 250 could be missing out on some potential profits. And with the new financial year here in a couple of weeks, I’ve been looking again for some candidates.
Ready to rebound?
Why is the ITV (LSE: ITV) share price struggling so much? It’s easy to point to declining TV ad revenues, but that’s only a part of it. The real uncertainty comes from the changing face of digital televisual entertainment. There’s intense compeition delivered through a multitiude of routes. And that, surely, can only continue.
The safety moat that a small number of big TV operators used to enjoy has dried up and was filled in long ago. Still, investors seem to be starting to take notice of ITV again. The share price has been recovering in 2025, boosted by full-year results on 6 March.
Cash cow
Despite the TV landscape upheaval, ITV’s still quite nicely profitable. CEO Carolyn McCall spoke of record profits from ITV Studios. She added: “ITVX has been the UK’s fastest growing streaming platform over the last two years.” And advertising has actually been going quite well.
Her update said: “The board remains committed to paying a full year ordinary dividend of at least 5.0p in 2025, which it expects to grow over the medium term.” And that keeps the yield over 6%.
ITV clearly still faces an unsure future, and that dividend can’t be guaranteed. But I suspect investors might have called the demise of ITV too soon. It surely has to be worth considering for the new Stocks and Shares ISA year.
Downtrodden retailer
The B&M European Value Retail (LSE: BME) share price has been through a strange five years. And it’s in a downward spiral again, losing nearly 50% in the past 12 months.
But I see another tempting dividend here, with a forecast yield of 5.5%. The discount retailer, best known in the UK for its B&M and Heron Foods chains, has a forecast price-to-earnings (P/E) ratio of only eight. That’s with earnings expected to grow over the next three years too.
In January, B&M lowered its full-year EBITDA guidance and that nudged the shares further down. But the change is relatively minor, with the previous range of £620m-£660m narrowed to £620m-£650m.
Profit from low prices
We mustn’t forget that this is a cut-price retailer. And one thing that means is that it’s not among the biggest-margin sectors in the FTSE 250. It also suggests it might not be the best kind of business to weather the ongoing economic storms.
Still, at Q3 time, CEO Alex Russo described the business as “undistracted by the current economic headlines“, and spoke of expected “positive volume growth across our ranges“. Oh, and the board announced a special dividend of 15p per share.
Again, this is a business going through tricky times. But again, I think it could be a mistake not to consider it.
