Down 49%, is there a passive income opportunity in this 7.2%-yielding stock?
- GC=F
- MEGP.L
I see a number of attractive passive income opportunities across the London Stock Exchange today. However, not all that glisters is gold when it comes to high dividend yields. Some can turn out to be shiny traps.
Here, I want to dig into a FTSE 250 stock with an ultra-high 7.2% yield that looks interesting. Is this a passive income opportunity worth exploring further?
Does the dividend look safe?
The name’s ME Group International (LSE:MEGP). After slumping 49% since June 2025, this stock’s offering that lip-smacking dividend yield.
How so? Well, City analysts currently expect a payout of 8.5p per share for the forthcoming business?
Why’s the stock crashed 49%?
As to how it makes money, ME Group has over 49,000 automated vending units across 18 countries. These include self-service washing machines, digital printing kiosks, photobooths (for both ID and fun), amusements and children’s rides.
The stock took a beating back in June when the firm warned that FY26 pre-tax profit would range £69m-£74m, down from previous expectations for about £79m. Management blamed the Middle East conflict and weakness in its French photobooth and laundry businesses.
And the conflict has hardly improved: in the Middle East, the situation is an unstable as it has been for much of the year.
Meanwhile France, a core market for ME Group, is another tinderbox, with nationwide protests and civil unrest. I have to assume people avoided popping out to do the laundry when the streets were barricaded.
Looking at this uncertainty, it’s clear why the stock has tanked and the yield has spiked.
Is ME Group worth checking out?
Looking further ahead, one worry I have is that photobooths become obsolete. For example, I renewed my passport two years ago and uploaded the new one photo directly from my smartphone. I didn’t need to visit a photobooth and fork out £10+.
That said, ME Group is diversified across countries while its offer, including amusements and fun photographs in booths (for young couples) are likely to prove timeless.
Also, in H1 FY26, its Wash.ME laundry <a s targeting 1,300 net new laundry machines in FY26, with 499 already installed in the first half. And a deal with Asda has been signed to install and operate laundry machines across the supermarket's sites. This was the group's largest laundry partnership to date, it noted.
