Is it time to buy ITV plc shares now?

ITV has been one of the worst performers in The FTSE 100 over the past six months.

However, considering its value and income, this popular British broadcaster would undoubtedly be a buy for me.

ITV’s share price is currently 72p, which is half of the price that ITV was trading at in June 2021.

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Not only is this penny stock far too cheap. It also has a high dividend yield of 5.71%.

The ITV share price is volatile, which is the shared nature of penny stocks.

Additionally, ITV reported a profit of £3.5bn in 2021

The profit increase indicates the company’s substantial progress as they achieved their record revenue.

There are risks, such as ITV’s plans to increase spending on TV content to compete with their broadcasting competition.

Investors of ITV are also worried about an upcoming trend of streaming services which will slowly replace regular television channels.

ITV introduced ITVX as their streaming service, but shares fell by 30% in value after its announcement.

The course of events shows investor fear and lack of trust in ITVX and its ability to compete with other streaming services.

The launch of ITVX is on track for Q4 2022

The streaming service will be free to use and ad-funded.

In their latest report, ITV’s Chief Executive, Carolyn McCall, stated that they are confident that the ITVX streaming service will increase its revenue by at least £750m by 2026.

ITV also predicts that its expected profit will grow by 33% over the next years and are on track to achieve a cost-saving goal of £17mil for 2022.

Although ITV’s streaming service may not be one of the best, the company is focused on the UK market only.

Data suggest that ITV has a 35% share of UK commercial television viewing which seems to be enough to sustain its position in the market.

Government approved new legislation called the Media White Paper

ITV and other British streaming services will be supported by this legislation, which will help ITV to compete with mainstream streaming services like Netflix or Disney+.

ITV keeps on expanding their studios and ensuring that they deliver TV content to diverse demographics in the UK.

This should further strengthens ITV’s position in the market.

The P/E ratio is 8.59x which is way below the industry average of 36.85x.

Meaning ITV is trading cheaper than other businesses in the industry, and it is time to accumulate funds in this stock in my opinion.

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