This FTSE income share has quietly become one of the most compelling opportunities in the market today, in my view.
Its asset‑light model, resilient cash flows and long record of dependable dividends have supported the payout through thick and thin. At the same time, a sharply depressed share price has created an unusually high yield and a striking valuation gap.
With earnings now recovering across its core switching markets, the disconnect between price and fundamentals looks increasingly hard to justify. And the dividend yield potential is difficult to ignore.
So what sort of returns might investors be looking at here?
Dividend gains potential
Tech-led savings company MONY Group (LSE: MONY) — formerly Moneysupermarket.com — already offers an 8.4% dividend yield. But analysts forecast its dividend will rise to 13.1p this year, 13.4p next year and 13.9p in 2028.
These would generate respective dividend yields of 8.7%, 8.9% and 9.2% on the current £1.51 share price. The latter is nearly triple the FTSE 100’s 3.1% average and more than two-and-a-half times the FTSE 250’s 3.4%.
Based on the 9.2% average — although this can go down or up over time — a £20,000 holding in the firm has the potential to make £30,010 after 10 years and £292,688 after 30 years. This also assumes dividend compounding is used to effectively turbocharge these payouts.
By the end of the cycle, the value of the holding (including the £20,000 original stake) could be £312,688. And this could pay an annual income (from dividends alone) of £26,927!
Share price gains?
Price and value are not the same thing in shares. Price is just whatever the market will pay at any time, while value reflects the underlying fundamentals of the business. This distinction matters, because over time a stock’s price tends to move towards its ‘fair value’ — whether up or down.
Discounted cash flow (DCF) analysis is the method by which any stock’s fair value can be identified. It projects a company’s future cash flows and then discounts them back to today to arrive at a present‑value estimate.
Different analysts will reach different conclusions based on the assumptions they use. My DCF modelling — which uses an 8.8% discount rate — shows MONY’s shares are around 59% undervalued at the current £1.51 price.
That implies a fair value of roughly £3.68 — more than double where the stock trades today. So that gap suggests a potentially terrific buying opportunity if those DCF assumptions prove right.
My investment view
Earnings growth powers any firm’s dividends and share price over time. One risk here to MONY is a cyber security breach, which could be costly to fix and could damage customer trust. Another is any regulatory changes to price‑comparison rules or data‑sharing requirements that could squeeze its margins.
However, analysts forecast that MONY’s earnings will grow an average of 7.5% a year over the medium term. This momentum appears well supported in its 2025 results, which showed record revenue of £446m and record adjusted earnings before interest, tax, depreciation, and amortisation of £145m.
I already hold several financial sector stocks, so owning another would unsettle the risk/reward balance of my portfolio. But for investors without this problem, I think MONY Group offers one of the most attractive combinations of income, value and earnings momentum anywhere in the FTSE today.
