Is the Macquarie Group Ltd (ASX: MQG) share price a buy during this coronavirus share market volatility?
I think asking whether every share is a buy during this time is worthwhile. Almost every share across the board is down because of the coronavirus volatility.
Macquarie is one of those businesses that could be affected significantly because of the nature of its operations. Financial companies are under a lot of scrutiny at the moment due to the unknown economic fallout of what's going on.
Most of the large European economies are coming to a standstill. Deals that aren't binding are unlikely to go through. And I can't imagine many businesses are looking to take up any aircraft leases at the moment. Initial public offerings (IPOs) are unlikely to go ahead in this environment.
It's a tough time for most of Macquarie's divisions.
The Macquarie share price is down 38% since 21 February 2020. Ouch. It's not GFC-like pain for the share price quite yet, but it's heading there.
Guidance has gone out of the window for many shares. Macquarie has previously said it expects FY20's profit to be lower than FY19's profit. I think you could definitely still say that about FY20's likely result.
What about the dividend?
Macquarie's trailing dividend yield is 6.6%, partially franked. But I wouldn't expect the next 12 months of dividends to be the same. If it were it would be a great yield, but I think businesses need to be prudent with their cash.
I think Macquarie is a very well run business with a good long-term future, but the short-term could be a tough time for the investment bank.
Over the past decade it has been a much better investment choice than 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).
After all this is over I think Macquarie will continue to be a better pick than the big four domestic ASX banks. But I think there are better opportunities out there for dividends.
