Insights

Here’s why the Macquarie (ASX:MQG) share price is attractive

The Macquarie Group Ltd (ASX:MQG) share price is looking pretty attractive right now for a few different reasons.
The post Here’s why the Macquarie (ASX:MQG) share price is attractive appeared first on The Motley Fool Australia. –

asx bank shares represented by large buidling with the word 'bank' on it

The Macquarie Group Ltd (ASX: MQG) share price is looking attractive at the moment, despite its strong run up in recent months.

Over the last six months, Macquarie shares have risen by 25% over the last six months. But there could be more to come as the business benefits from the recovery.

Macquarie is one of the most global ASX blue chips at the moment, with around two thirds of its earnings coming from international sources.

These are a few reasons why Macquarie could be one to watch:

Stronger near-term profit outlook

One of the most important ways to judge a business is by its profit-making potential and profit actual results.

Macquarie has had a volatile last 12 months, but it’s now reporting that the profit is getting stronger

Despite giving the market profit guidance on 9 February 2021 saying that the FY21 result was likely to be slightly down, Macquarie came back to the market a few weeks later to say that it was now expecting net profit after tax for FY21 to be up 5% to 10% compared to the last financial year.

Macquarie explained that extreme winter weather in North America had significantly increased short-term client demand for Macquarie’s capabilities in maintaining critical physical supply across the commodity complex and particularly in relation to gas and power.

The global investment bank’s commodities and global markets (CGM) business physically ships gas on the majority of major pipelines across the US and over time has built capacity to support clients by delivering power and physical commodities to help them meet the unexpected needs of their customers.

Recovering global economy

A year ago things were looking pretty bleak for the global economy as the COVID-19 pandemic ravaged the world and caused massive market volatility and dislocation.

As a global investment bank, Macquarie needs a decent operating environment to generate profit growth. Macquarie is seeing improving trading conditions in certain areas, though it did admit that market conditions are likely to remain challenging.

The ASX share was confident enough to pursue the acquisition of NYSE-listed Waddell & Reed Financial a few months ago, which had US$68 billion of assets under management (AUM) at the time of the announcement.

This acquisition is expected to push Macquarie Asset Management’s AUM over A$650 billion, making it one of the 25 largest actively managed, long-term, open-ended US mutual fund managers by AUM.

The deal will add scale and diversification to the business.

Diversified earnings

Macquarie has the ability to invest and grow anywhere in the world that it wants to.

It’s generating profit from right across the world and it can put further resources into segments like green energy, infrastructure or any other trend that it sees as a long-term opportunity.

The business has changed a lot since the GFC and it’s now a much more stable, reliable business. The ‘annuity-style’ businesses provide a particularly defensive amount of annual earnings for the business.

What’s the Macquarie share price valuation?

According to Commsec, Macquarie shares are priced at 19x FY22’s estimated earnings.

It has a forecast partially franked dividend yield of 3.6% for FY22.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Here’s why the Macquarie (ASX:MQG) share price is attractive appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!