Passive income starts with finding companies that can keep paying dividends year after year with minimal effort from investors. That usually means dependable cash generation, resilient demand and a business model that does not need heavy reinvestment to grow.
Tech-led savings company MONY Group (LSE: MONY), previously Moneysupermarket.com, ticks all three boxes for me.
It throws off steady cash, benefits from structural consumer behaviour, and runs an asset‑light model that supports reliable dividends. That combination makes it one of the most compelling passive‑income candidates in the FTSE, in my view.
So, how much could investors make from it?
What’s the dividend profile?
MONY’s last annual dividend (2025) of 12.63p already gives a market-beating yield of 7%. The FTSE 100’s present average is 3.1% and the FTSE 250’s is 3.4%.
Such returns can go up but also down as the share price and annual payouts change, of course. But analysts forecast that the firm will pay a 13.2p dividend this year, 13.6p next year, and 14.2p in 2028.
Based on the current £1.80 share price, these would generate respective dividend yields of 7.4%, 7.6%, and 7.9%.
What does it mean in income terms?
Investors considering a £20,000 holding would make £23,954 in dividends after 10 years. The figure assumes the forecast 7.9% as an average and that dividend compounding is used.
The process is similar to leaving interest to accrue over time in a regular savings account. But the effect on dividend returns can increase exponentially as the years pass.
On the same basis, the dividends would increase to £192,293 after 30 years. By that point, the holding’s total worth would be £212, 293.
And that could be paying a yearly income of £16,771!
Share price gains in sight too?
Ultimately, dividend gains — and share price rises — are powered by consistent rises in a company’s earnings over time.
A risk here for MONY is increased competition in digital comparison tools. Another is any regulatory change as to how financial products are marketed online. Both factors could squeeze margins and slow earnings.
Nevertheless, analysts expect MONY’s earnings to grow by an average of 7% a year to end-2028 at minimum.
Where could this power the share price?
Discounted cash flow (DCF) analysis works by forecasting a company’s future cash generation and converting it into today’s value. Where those forecasts are less straightforward, the discount rate increases and analysts’ sometimes differing assumptions here can vary the DCF outcomes.
Given my modelling, including a 9.2% discount rate, MONY looks 48% undervalued at its present price. That places its fair value around £3.46 — nearly double the current level.
Historically, share prices tend to trade to their fair value over time. So, if this trend continues (not guaranteed) then this could be a great potential buying opportunity if those DCF assumptions prove correct.
My investment view
I am beyond miffed that my portfolio’s positioning precludes me from buying this stock, as I think it is a corker. But I already own several stocks in the financial sector, so owning another would unbalance my overall holdings’ risk/reward balance.
For those fortunate souls who do not have this problem, I think it well worth their serious consideration.
Should you invest £5,000 in Mony Group Plc right now?
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Simon Watkins does not hold any positions in the companies mentioned.
