Is the Macquarie Group Ltd (ASX: MQG) share price a buy today?
You may have seen that Macquarie held its AGM today for its shareholders.
As part of the AGM, Macquarie gave a first quarter update about its FY20, which has sent its share price 0.7% higher at the time of writing.
Pleasingly, the company said that its operating groups are performing in line with expectations and that the net profit contribution is broadly in line with the first quarter of FY19, although it was slightly down on the last quarter of FY19 (which was the latest quarter).
But, despite performing to expectations, Macquarie still expects the FY20 result to be slightly down on FY19.
It’s important to remember that not many businesses can grow their profit year after year for many years in a row. Particularly ones in cyclical industries such as financials.
Macquarie is a great blue chip business and its profit growth has far exceeded Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ) over the past five years.
Macquarie is a quality business with earnings from across the world from many categories, not just mostly from loans like the big four ASX banks.
Over the longer-term I expect Macquarie will be able to continue to generate good returns from its asset management business with the growing demand for new infrastructure in Australia, North America, Asia and Europe. It’s a good sector to be in and it’s one of the top players in the world.
Macquarie is trading at only 14x FY21’s estimated earnings with a partially franked dividend yield of 4.4%. I’m not a buyer of Macquarie today, but I think it’s worth keeping an eye on.
For my own portfolio I’d rather invest in one of these top-notch businesses for growth and dividends.
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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 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.