It used to be called Moneysupermarket.com, now it’s MONY Group (LSE: MONY), and it looks like it could be a tasty passive income investment.
Dividend growth has been steady for years, with specials occasionally supplementing the ordinary dividends. After a few flat Covid years, rises resumed in 2023 — with analysts expecting the trend to continue at least until 2028, backed by earnings growth. And for the current year, we’re looking at a forecast yield of 6.9%.
What’s it worth?
The MONY share price hasn’t done much over the past five years, though that’s helped boost the dividend yield. It also means today’s valuation looks pretty modest.
The price-to-earnings (P/E) ratio has been falling for the past few years, and there’s a forecast for only 10.5 for fiscal 2026. With positive broker sentiment, that’s expected to drop to only around 9.3 by 2028.
Looking at what’s on the balance sheet, I don’t see any need to worry about liquidity. MONY has net cash, predicted at £13m this year and growing to £87m by 2028. Hmm, I wonder if we might be in line for another of those special dividends?
Record performance
At the moment, the company is returning surplus cash by repurchasing its own shares. At full-year results time in February, MONY told us it had completed a £30m buyback in 2025, and launched a new £25m one for 2026 — and that’s still ongoing.
Here are a few highlights from those 2025 results…
- Record revenue of £446.3m
- Highest ever adjusted EBITDA of £145.1m
- Operating costs down 4%
- Adjusted Basic Earnings Per Share up 5%
The boss sounded pleased with the company’s performance…
Our flagship member-based proposition SuperSaveClub has grown to over 2.1 million members and shows no signs of slowing, and this loyal, engaged member base is driving meaningful increases in customer lifetime value.
— CEO Peter Duffy, FY 2025
Why so cheap?
I can see a few possible reasons for the lack of investor enthusiasm for MONY shares, even with the potential for long-term passive income. One is that growth in the competitive price-comparison business tends to be slow. Last year might have brought records, but EPS was up only a modest 5%.
Fears are also growing that this kind of service could be eclipsed by the advance of AI. What if we can just ask a chatbot something like: “Compare all insurance deals and find me the best“?
Against that, though, comparison sites frequently offer their own exclusive deals, not generally available. I see that as one of the key long-term strengths for this business. And MONY already offers some AI-backed services of its own.
Passive income
There are competitive risks here. But does MONY Group offer something worth serious consideration by passive income investors? I think so, and it’s on my candidates list. It’s just a shame I don’t have the money to buy everything I like.
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Alan Oscroft does not hold any positions in the companies mentioned.
