The Macquarie Group Ltd (ASX: MQG) share price has been very impressive over the medium to long term.
Over the past 5 years, shares in the bank have appreciated a whopping 120% to their current price of $177.47 a unit. The next closest big bank, Commonwealth Bank of Australia (ASX: CBA), is up 43% over the same timeframe.
No other major bank cracks even a 10% value gain over the past 5 years.
If you're an investor who came in a little late to the game, say 1 year ago, then the CBA share price would be your friend. In 12 months, shares in Australia's biggest bank are up 52% while the Macquarie share price is 40% higher. For context, the S&P/ASX 200 Index (ASX: XJO) is 39% higher over 5 years and up 26% in 1 year.
It should also be noted that when the COVID-induced market crash of March 2020 occurred, CBA and Macquarie lost all of the gains they had made over the course of years in a matter of days.
Since then, the value of both companies has exceeded their pre-pandemic levels. Therefore, it would be more meaningful to focus on developments that have occurred since last year's market crash.
What affected the Macquarie share price?
When Macquarie released a third-quarter update in February this year, the Macquarie share price rocketed 7% in a single day.
As Motley Fool reported, for the three months ended 31 December, Macquarie Group experienced improved trading conditions. At the time, the company said the combined third-quarter net profit contribution from its annuity-style businesses was up on the prior corresponding period (pcp).
Yesterday, the Macquarie share price gained a further 6% when the group released an update on its short-term prospects.
The company advised that it expected results for the first half of FY22 to be "slightly down" on the second half of FY21. Macquarie said stiffer competition in the banking sector, rising expenses, and falling commodity returns were to blame.
How about the CBA share price?
When CBA released its first-quarter update for FY21 in November last year, the CBA share price skyrocketed 10.7% over the space of 2 weeks.
At the time, CBA revealed a "stronger than expected" cash net profit after tax of $1.8 billion. While it was down on the pcp, the results were better than many analysts had forecast.
Also in that release, CommBank said that by the end of October 2020 there was a net reduction in total loan deferred facilities of 59%, representing a monthly net reduction in deferred balances of about $21 billion. This may have also been a reason for the rising CBA share price at the time.
More recently, the release of the CBA full-year results last month was a boon for shareholders of the company.
Recording a 20% rise in net profits and paying a fully franked dividend of $2.00 per unit, CBA shares were very popular that day. The company also announced a $6 billion off-market share buyback to return further capital to shareholders.
What's next for the Macquarie share price?
As Motley Fool has previously reported, brokers at Goldman Sachs, while fans of the company, aren't fans of its valuation.
Goldman Sachs analysts have given Macquarie a neutral rating. They think fair value is about $171 per share. They believe the Macquarie share price may have peaked for the time being.
However, The Australian newspaper is reporting today that some analysts believe Macquarie will become only the third company in ASX history, after CSL Limited (ASX: CSL) and Cochlear Limited (ASX: COH), to crack the $200 per share mark.
Quoted in the national broadsheet, Cadence Capital's managing director Karl Siegling said:
As long as they sustain it (earnings) they can grow into a new valuation, and that's what's happening.
These guys just keep on keeping on and they just keep delivering, and it's just a matter of time (before the share price hits $200).
Foolish takeaway
All in all, it seems to be a profitable time for long-term investors of either CBA or Macquarie Group.
While the Macquarie share price does have the upper hand, this analysis does not take into account the impact of dividends and their franking percentages. For some investors, this may be more important than just the share price.
