MENU

Macquarie Group Ltd (ASX:MQG) provides outlook update

The Macquarie Group Ltd (ASX: MQG) share price will be on watch on Tuesday after the global diversified financial group released a presentation and outlook update ahead of presenting at the CLSA Investors’ Forum in Hong Kong.

According to the release, Macquarie has had a positive start to FY 2019 with all operating groups performing in line with expectations. This has led to its operating group contribution rising compared to the prior corresponding period but declining slightly on the strong fourth quarter of FY 2018.

Macquarie’s annuity-style businesses have continued to perform well thanks partly to continued strong base and performance fees in MAM.

This has offset a softer performance from its CAF Principal Finance business which is down due to the timing of transactions and a reduction in the size of the portfolio. The company’s CAF Asset Finance business is broadly in line with the prior corresponding period.

Another positive has been the continued growth in mortgages, business banking, and platforms in BFS. Management advised that deposits are broadly in line with the prior corresponding period.

Macquarie’s capital markets facing businesses have also performed well so far in FY 2019. They have experienced strong trading conditions across most markets, but particularly in commodity markets and fixed income products.

Elsewhere, the MacCap balance sheet positions are performing in line with expectations, though fee revenue from DCM is down on a strong corresponding period.

Outlook.

Despite the solid start to year, management has held firm with its full year guidance for a result in line with the one it delivered in FY 2018.

This guidance does remain subject to market conditions, currency fluctuations, regulatory changes, geographic composition of income, and transaction completion rates. In respect to the latter, it is worth noting that the sale of the Quadrant Energy business to Santos Ltd (ASX: STO) has not been included in its outlook.

Should you invest?

While the guidance for FY 2019 is not the strongest, I feel Macquarie is still one of the best options in the financial sector due to being well positioned to deliver a superior performance in the medium-term.

This could make it a great alternative to bank shares such as Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd (ASX: NAB).

Not keen on the banks? Then take a look at this top dividend share that has been tipped for big things.

OUR #1 dividend pick to grow your wealth now is revealed for FREE here!

You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of National Australia Bank Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.