The Macquarie Group Ltd (ASX: MQG) share price could be a buy for dividends after the Reserve Bank of Australia (RBA) hands down its decision today about what to do with interest rates.
If the RBA decides to cut rates then Macquarie could be one of the shares to benefit.
The big four ASX banks of 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) could see a reduction of their net interest margin (NIM) and therefore cash net profit.
But Macquarie's earnings may potentially benefit. A significant amount of its earnings is based on infrastructure management fees, which could rise if the value of the assets increase, as they theoretically should with the US Fed and the RBA reducing interest rates.
There may also be a flurry of corporate activity with lower interest rates which Macquarie could benefit from as it's regularly one of the advisors or brokers in these types of deals.
Macquarie shareholders themselves may benefit from a share price increase if investors look to try to find a place for yield and potential growth.
Foolish takeaway
Macquarie is trading at 15x FY20's estimated earnings. The global investment bank currently offers a partially franked dividend yield of 4.4%.
It's the only 'bank' I'd want to own on the ASX because its earnings are a lot more diversified and it operates across the world, which should provide a more stable earnings base and allows it to invest wherever the best opportunity is. But it's not the type of dividend share I'd choose for my own portfolio.
