When you are looking to buy anything nowadays, it is easier than ever to compare prices across the market. With the rise of comparison websites there are plenty of easy ways to ensure you get the best deal out there. From insurance to utilities to mobile phone contracts, it seems nothing is off-limits to comparison sites now.
Moneysupermarket.com (LSE:MONY) is one of the standout names in the online comparison market. Initially founded in the late 1980s as a mortgage business, it has tended to specialise in financial services.
Recent performance
It posted full-year results last week in line with market expectations: group revenue increased 9% to £388.4m from £355.6m. In its last quarter the price comparison website saw its home services division grow by 36%. However, its money line of business declined by 14%, although management expects that it will return to growth this year.
The encouraging information to take away from the results posted last week is that profits after tax have grown by 10% over the year from £129.4m in 2018 to £141.5m in 2019. It also announced continued strong operating cash generation of £113.7m, with £100m in dividends distributed to shareholders during the year.
The full-year dividend per share increased by 6% compared to the previous year which is a positive reflection of a “progressive dividend policy.”
The update provided doesn’t jump off the page, but it is definitely the sign of a business quietly doing well in an industry where plenty of others are jostling for market share.
Increases in dividend per share as well as profits are always encouraging when looking to invest in a business, as is reinvestment in the business. Moneysupermarket.com has pledged to focus on optimising customer experience. Add to that the fact that it is adding an energy auto switching module to its ever-growing arsenal, and things are coming together nicely.
The group announced that CEO Mark Lewis wishes to resign, which creates some uncertainty at the top. But the board is “confident of delivering expectations for the year” in 2020. The announcement did cause a slight dip in the share price. Recent results will have allayed fears that the resignation was down to poor performance.
Next steps
There is a lot to take stock of (pardon the pun) when it comes to Moneysupermarket.com. I am encouraged by positive results but others will be wary of a leadership change.
I would not buy this stock to turn around quickly and make a quick buck. This is the type of stock I envisage growing throughout 2020 and beyond. This is very much a long term-investment if you decided to take the plunge and buy some shares. I think this could sit well in the ‘long-term and watch’ category of your portfolio.