The Macquarie Group Ltd (ASX: MQG) share price closed at a new record high on Friday – but is this just the start?
Shares in the Aussie wealth manager closed trade at $146.96 per share last week after a bumper start to 2020. Macquarie shares are now up 151.90% in the last 4 years and show no sign of slowing down.
But with a big week ahead, can the Aussie wealth manager’s shares break through the $150 mark?
Why Macquarie shares have rocketed higher
The wealth manager has had a bullish run in recent years compared to other ASX banking shares.
Macquarie largely avoided the scrutiny of the other banks in the 2018 Financial Services Royal Commission. The big four banks like Commonwealth Bank of Australia Ltd (ASX: CBA) and Westpac Banking Corp (ASX: WBC) have also had their fair share of scandals.
Other than just public perception, the Aussie wealth manager hasn’t had to bear the significant customer remediation costs of its peers. While AMP Ltd (ASX: AMP) and IOOF Holdings Ltd (ASX: IFL) have been busy working to right the ship, Macquarie shares have been quietly climbing higher.
Is Macquarie worth $150 per share?
There’s a good argument that Macquarie is the best ASX banking share on the market right now.
The group’s shares are trading at price-to-earnings ratio of 15.46 times earnings right now. That’s slightly more expensive than Westpac (13.2 times) and cheaper than CBA (18.5 times).
Macquarie shares have also outperformed many of its banking and wealth management peers recently with the exception of Magellan Financial Group Ltd (ASX: MFG).
Macquarie is yielding a tidy 4.15%, but that is lower than both Westpac (6.96%) and CBA (5.08%). The real question for dividend investors is whether or not the potential capital gains are worth the lower dividend yield.
I like Macquarie’s diversified earnings profile compared to the other Aussie banks. If I was looking for ASX banking exposure, Macquarie shares would be at the top of my to-buy list.
The Aussie bank is set to release its half-year results in the mini bank reporting season in May. I think Macquarie could break the $150 barrier in February, but there could still be long-term value if you wait until the earnings report.
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Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group 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.