In the ever-evolving world of investing, it's crucial to stay ahead of the curve and make informed decisions. With market volatility at an all-time high, it's time to dive into the realm of bargain-basement income stocks, specifically those that can be held within an ISA. Today, we'll explore two such stocks that could be considered for your ISA portfolio: Card Factory and ITV.
Card Factory: A Value-Driven Retailer
Card Factory, a retail giant in the greeting card and celebration accessories space, is a prime example of a value-driven stock. While it's exposed to the rapid downturn in consumer spending, particularly in the face of escalating Middle East tensions, its focus on the value end of the market could be a stabilizing force. People will always need to send birthday cards and celebrate major occasions, even during tough times.
The company's shares are currently trading at a forward price-to-earnings (P/E) ratio of 4.8, which some argue fully reflects the challenges it faces. This low valuation could limit the potential for significant price downside. Moreover, Card Factory's shares offer an enormous 8.4% dividend yield for the current financial year, ending in January 2027. The predicted 5.2p per share annual dividend is covered 2.4 times by anticipated earnings, ensuring a stable shareholder payout even if earnings take a hit.
Management's cost-cutting drive is another positive aspect, as it aims to protect profits and dividends if sales drop. Looking ahead, Card Factory's expansion into higher-margin gifts and celebration accessories, along with its international market expansion and investment in the high-growth online channel, could lead to significant returns. While the short-term risks are real, the long-term prospects are promising.
ITV: Streaming's Traditional Broadcaster
In an era dominated by streaming services, traditional broadcasters like ITV might seem like an outdated investment. However, ITV is making impressive inroads into the streaming market, outperforming US giants in the process. The ITVX platform saw a 12% year-on-year surge in active users in 2025, showcasing the depth of its popular programming.
ITV's strength lies in its ability to secure sales opportunities through its ITV Studios arm. External revenues at the production unit rose by 10% last year, attributed to strong demand from global streaming platforms. This diversification into the streaming market, coupled with its traditional broadcasting strengths, positions ITV as a resilient investment.
The company's exceptional value for money is evident through its price-to-earnings growth (PEG) ratio of 0.5 for 2026, which is well within the desirable value territory of 1 or below. Additionally, ITV's dividend yield of 6.7%, based on an expected 5p payout, further enhances its attractiveness. While the streaming landscape is competitive, ITV's strategic moves and strong fundamentals make it a compelling choice for investors seeking stable income.
In conclusion, Card Factory and ITV are two bargain-basement income stocks that could be considered for your ISA portfolio. While Card Factory's focus on the value end of the market and cost-cutting strategies make it a resilient choice, ITV's streaming market dominance and traditional broadcasting strengths position it as a stable income generator. Both stocks offer attractive dividend yields and are trading at valuations that reflect their challenges and opportunities. As always, investors should conduct thorough research and consider their risk tolerance before making any investment decisions.
