I have been trying to use my share portfolio to generate income. That is why I have been looking for high-yield shares in attractive companies I can buy. Here are three I already own — and would keep buying for my portfolio at their current price, if I had spare cash to invest.
ITV
Why do I own shares in broadcaster ITV (LSE: ITV)? Its strong business and the 6.4% dividend yield attracted me.
But not everyone is convinced the firm has a strong future, as terrestrial television declines in popularity and the advertising market suffers in a recession. However, ITV continues to generate sizeable revenues from advertising. In fact, they grew 5% in the first half of this year, compared to the same period last year.
ITV has launched an advertising-funded streaming service and saw a 55% year on year increase in the number of hours viewers streamed in the first month after launch. That could help support further ad revenue growth.
On top of that, I see value in the company’s production arm as demand for original media content remains buoyant. Trading on a price-to-earnings ratio of under 7, I see these shares as a potential bargain for my portfolio.
M&G
Another high-yield share I own in my portfolio is M&G (LSE: MNG). For starters, the company operates in an area I expect to see sustained demand over the long term: financial services.
While that can be a crowded field, M&G’s long experience, reputation and established brand help set it apart from competitors. It has a proven ability to generate attractive profit margins. Last year’s earnings after tax of £92m were only 2% of revenues. But the prior year, post-tax profits came in at £1.1bn and represented 19.7% of revenues.
A rocky stock market is a risk, as it could lead investors to withdraw funds, hurting profits at the firm. But I see an opportunity for my portfolio here. With a 9% yield, I see the shares as a bargain and will continue to hold them.
Altria
I own some British tobacco companies in my portfolio. But I also see some smoking-hot opportunities across the pond.
For example, I currently have a position in Altria (NYSE: MO). As the US distributor of the well-known Marlboro line of cigarettes, I see the company as a virtual gold mine. However, cigarette sales are falling and the company has written down billions of dollars on underperforming investments in cigarette alternatives.
That has led to the Altria share price falling 10% in a year. I see it as a high-yield bargain for my portfolio, with its 8.2% dividend ratio relative to share price. If I had spare cash to invest today, I would add some more Altria shares to my income portfolio.
