A FTSE 100 dividend stock I'd buy over sliding Moneysupermarket Group plc

The latest Moneysupermarket Group (LSE: MONY) trading release contained enough scary stuff to send investors stampeding towards the door on Thursday.

The business -- which had already shed 10% of its share value in the six weeks to today's session -- was last dealing 15% lower on the day, although off the intraday lows that saw it sink to its cheapest since July 2016 below 250p per share.

In its frightful statement Moneysupermarket said that revenues rose 4% during 2017, to £329.7m, a result that pushed post-tax profit 6% higher to £78.1m, results that fell slightly shy of forecasts.

But it was warnings over 2018 profitability that really sent investors scurrying for cover. It warned that, having "started the year at a similar growth rate to last year," that as a result "adjusted EBITDA for 2018 is expected to be broadly flat before growth resumes from 2019 onwards." Adjusted EBITDA rose 5% last year, to £127.2m.

The FTSE 250 business added that its markets are expected to grow between 6% and 7% in 2018, putting an extra dampener on proceedings. The price comparison giant wasn't done yet, however, and rounded things off by advising that, in an effort to boost the customer experience that the necessary investment in its product engineering teams would result in an hefty £5m bill.

On the ropes

I liked Moneysupermarket on the back of its reliable growth record and progressive dividend policy, but today's update now puts both of these in peril and thus seen me revise my bullish viewpoint.

Prior to today City brokers had been expecting earnings to rise 8% in 2018 and 9% next year, but with these projections about to fall by the wayside a reasonable forward P/E ratio of 15.4 times is also pretty irrelevant.

While Moneysupermarket hiked the full-year dividend 6% in 2017, to 10.44p per share, suddenly predictions of additional hikes to 12p this year and 12.7p next year -- figures that yield a chunky 4.3% and 4.5% respectively -- are by no means a foregone conclusion.

A brilliant long term buy

WPP (LSE: WPP) is another London-quoted stock that hasn't exactly had it all its own way in recent times, reflecting a backcloth of pressured advertising expenditure across the globe.

Although a solid uptick in advertisers' budgets may be a little way off yet, political elections in 2018 and sporting events like the FIFA World Cup and Winter Olympics in 2018 should help stop the rot. Besides, I am confident in WPP's ability to snatch business from its rivals will be enough to keep earnings rattling skywards (indeed, its secured $2.1bn worth of new business wins during the July-September quarter alone).

City analysts share my glass-half-full assessment, and they are predicting that the FTSE 100's long-running growth story will continue with profits rises of 3% and 5% in 2018 and 2019 respectively (building from an estimated 5% rise in the last year).

And these forecasts underpin hopes of further dividend progression. In 2018 WPP is expected to pay a 61.9p per share dividend, up from an expected 59.9p for last year, and this is predicted to rise again to 64.7p per share.

Subsequent yields of 4.6% and 4.8% for 2018 and 2019 respectively, along with a forward P/E ratio of 11 times, make the marketing colossus too cheap to miss, in my opinion.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Moneysupermarket.com. 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.

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