This FTSE 250 tech stock could be a long-term growth pick. Here’s what I would do now

Jabran Khan looks at why this stock could be a long-term growth stock for your portfolio.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

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. 

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Jabran Khan has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »