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I am looking to add to my holdings UK stocks that offer returns and growth prospects. can Money supermarket Does (LSE:MONY) fit the bill here? Let’s take a deeper look at whether I should buy or avoid stocks.
Comparison services
As a quick note, Moneysupermarket.com is a leading comparison website for consumers to compare the best insurance products and other services. Consumers can fill their details and choose the best offer for them and switch products. I have used it in the past when looking for auto, home and travel insurance.
So what’s happening to Moneysupermarket shares at the moment? Well, as I write, they are burning at 190p. This time last year, the stock was trading for 240p, a 20% drop over the 12-month period. Many stocks have fallen in recent months due to macroeconomic headwinds, as well as the tragic events in Ukraine.
Bull and bear case
Let’s look at some bullish and bearish aspects of Moneysupermarket shares. I’ll start with some positives.
Firstly, I am impressed with Moneysupermarket’s presence, profile and brand power. It helped consumers save an estimated £1.6bn last year. In addition, she continued to grow the business through strategic acquisitions of smaller sites and integrated into her offering to grow the business. A prime example of this is Quidco’s acquisition of a major cashback position.
Next, I believe Money Supermarket is primed to benefit from the current economic outlook. The cost of living crisis created by high inflation should keep consumers looking for cheaper deals on essential household bills. In turn, this can increase performance and come back.
Also, I like the look of Moneysupermarket’s performance track record. I know that past performance is no guarantee of future. But, looking back, the update for the six months ending 30 June 2022 was impressive. He said that the revenue has grown by 10 percent and especially the demand for insurance products has increased.
Finally, Moneysupermarket shares increase my passive income stream through dividends. The current dividend is over 6%. This is high FTSE 250 Average 1.9% but I know dividends are not guaranteed.
So to the bear cage. I noticed that the energy comparison market was closed due to the recent events surrounding energy prices. This may impact demand for Moneysupermarket’s services and impact performance and returns. This service is expected to be closed for at least the rest of the year.
Finally, some comparison sites have come under pressure in recent years after the Competition and Markets Authority shined a light on some questionable practices. Some organizations were also fined. This can damage the balance sheet, as well as investor sentiment and brand reputation.
My judgment
In conclusion, the positives outweigh the negatives for me when it comes to Moneysupermarket shares. I would be willing to add stocks to my holdings. Passive income opportunity, comparative market position, and performance track record help build my investment case.