Is now the time to buy Moneysupermarket.Com Group plc ahead of a "record year"?

Shares of Moneysupermarket.Com Group (LSE: MONY) rose by 7% this morning, after the price comparison giant advised investors that it's "on track for a record year." Revenues rose by 12% to £76m during the third quarter, thanks to strong growth in insurance, credit cards and loans.

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Of course, Moneysupermarket's relentless growth means that since at least 2010, every year has been a record year. The real question for investors is what will happen when growth starts to slow. The latest broker forecasts suggest this process could start in 2017.

In this article, I'll take a closer look at the trading update and valuation. I'll also look at another successful internet stock, whose track record provides some clues about what Moneysupermarket's incoming chief executive might do next.

Growth could surprise

Outgoing chief executive Peter Plumb said today that the group's technology platform "is allowing innovative services to be pioneered" and that "many more households" will benefit from the group's services in the years ahead.

Mr Plumb has overseen a 400% rise in the firm's share price since he took charge in 2009, but he's leaving in May 2017. He will be replaced by Mark Lewis, who is currently retail director at John Lewis.

Market analysts expect Mr Plumb's departure to coincide with slower earnings growth. Consensus forecasts suggest earnings per share will rise by 26% this year, but forecasts for 2017 indicate EPS growth of just 8%.

My experience as a consumer suggests that the price comparison sector is more mature than it was a few years ago. But this won't necessarily prevent profits rising at Moneysupermarket.

The group's operating margin has risen from 13% in 2011 to a record high of 30% during the first half of this year. Growth has also driven by higher profit margins and stronger cash generation. Moneysupermarket ended last year with net cash of £16.7m, despite making a final payment of £20.6m on its 2012 acquisition of MoneySavingExpert.com.

I suspect that in the absence of major acquisitions, Moneysupermarket is likely to use a combination of share buybacks and dividends to lift earnings per share and accelerate shareholder returns.

The shares already offer a forecast yield of 3.5%, rising to 4% in 2017. In my view shareholder returns are likely to continue rising, making the shares a medium-term buy.

This is how it's done

If you'd like to see how businesses that generate a lot of surplus cash can use this to reward shareholders, then look no further than property website Rightmove (LSE: RMV).

During the first half of this year, Rightmove used dividends and buybacks to return 82% of its operating profit, or £66m, to shareholders. The company doesn't need to fund acquisitions or expansion -- all it needs to do is maintain the IT and marketing expenditure needed to protect its current position.

Rightmove has used share buybacks to reduce its share count from 111.4m during 2010 to just 93.8m today. These buybacks alone have provided shareholders with an 18.7% rise in earnings per share over the last six years.

Rightmove has delivered outright profit growth on top of this, of course, but these numbers show how useful buybacks can be for companies with genuine surplus cash. Only time will tell if Mark Lewis follows this path.

Today's top growth buy?

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They've identified a company they think could triple in value over the next few years. A profitable track record and a very well-known brand are expected to fuel strong growth.

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Roland Head has no position in any shares mentioned. The Motley Fool UK has recommended Moneysupermarket.com and Rightmove. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.