The FTSE 250 average dividend yield is 3.4%. When I compare it to the base interest rate of 3.75%, that’s OK. However, more active stock selection can help an investor easily exceed the average dividend payments. In fact, it’s possible to aim for over 8% when building a passive income portfolio. Here’s one stock to consider.
Company details
I’m talking about MONY Group (LSE:MONY). The company has a dividend yield of 7.8%, and its share price is down 11% over the past year.
If you’ve ever compared car insurance or broadband deals online, chances are you’ve already used one of MONY Group’s platforms without even realising it. The company sits behind household names like MoneySuperMarket and MoneySavingExpert, acting as a middleman that connects consumers with financial providers. It earns referral fees when users switch products, operating a relatively simple business model.
In terms of the stock’s decline over the past year, the biggest culprit has been a slowdown in the insurance market. After a period of high premiums (which boosted switching activity and profits), prices have started to fall. This has reduced consumers’ incentive to shop around. Insurance is the largest revenue contributor for MONY Group (double the size of the next-largest segment), but revenue fell by £3m in 2025 compared with 2024.
Another risk going forward is ongoing fears that AI could bypass comparison sites. It could effectively replace the MONY Group site, though I think this concern is overblown.
The future
Before we get to the dividend discussion, let’s consider why I think the company’s overall outlook is positive. A big factor is the potential for a cyclical recovery. If inflation worries ease and UK interest rates fall later this year, consumer activity should pick up. Even without that external factor, structural growth should come from the continued traction that the ‘SuperSaveClub”’subscription model is getting.
This provides higher-margin recurring revenue and better customer lifetime value. Finally, the business is investing heavily in technology. This is primarily via investments in AI tools and platform improvements. This should enhance the user experience and reduce costs.
Now let’s get to the dividend forecast. The dividend per share has been ticking higher for the past few years. Over the past year, the total paid has been 12.63p. Analysts expect this to rise to 13.13p next year, then to 13.36p in 2028. If I assume the share price stays at 162p, this would translate to a yield of 8.24%.
Of course, the stock could rise or fall by then, meaning the actual yield could be higher or lower. But a move higher in the dividend, along with the potential for advances within the company, makes the stock look attractive right now. Investors who agree with my thinking could consider buying.
