The Macquarie share price has lost 10% in a month. So what’s the dividend yield now?

How is the Macquarie dividend yield looking after the share price fell 10% in just one month?

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Key points

  • With a recent decline of the Macquarie share price of around 10%, its prospective dividend yield is boosted
  • One expert thinks that the global investment’s earnings may have hit a ceiling for now
  • Brokers are expecting Macquarie to pay a dividend yield of more than 3% in the next couple of years

The Macquarie Group Ltd (ASX: MQG) share price has fallen by almost 10% since 5 May 2022.

Not only is the share price down, but a lower valuation also means that the potential future dividend yield has increased.

We check how things are looking for the global investment bank’s potential income for shareholders.

Volatility for the Macquarie share price

There has been significant volatility for the ASX share market as a whole. Macquarie Group has also seen ups and downs in 2022. However, the company’s latest decline came after the business reported its FY22 result last month.

At the time, Macquarie reported a number of positives.

Its FY22 net profit after tax (NPAT) was $4.7 billion, up 56% year on year. It generated $2.66 billion of net profit in the second half of FY22, which was up 31% year on year.

Macquarie is increasingly becoming a global business. In FY22, 75% of its total income came from international sources.

Its assets under management (AUM) rose 37% year on year to $774.8 billion.

The global investment bank also noted that its financial position comfortably exceeded regulatory minimum requirements, with $10.7 billion of surplus capital.

Macquarie managing director and CEO Shemara Wikramanayake said:

Macquarie remains well-positioned to deliver superior performance in the medium-term. This is due to our expertise in major markets, strength in business and geographic diversity and ability to adapt the portfolio mix to changing market conditions, an ongoing program to identify cost saving initiatives and efficiency, a strong and conservative balance sheet, and a proven risk management framework culture.

The broker Credit Suisse is one of the experts that has gone negative on Macquarie, with an underperform rating. It’s speculated there could be headwinds with rising interest rates and the profit may have hit a ceiling in this economic period.

However, other brokers, such as Ord Minnett, have rated the Macquarie share price as a buy. Ord Minnett has set a price target of $218, implying a possible rise of around 20%.

Dividend expectations

Looking at dividend projections, brokers are now expecting a sizeable dividend yield from the business in the next two financial years.

Excluding the possible franking credits, Credit Suisse is expecting Macquarie to pay a dividend of 3.25% in FY23 and 3.2% in FY24 at the current Macquarie share price.

However, on Ord Minnett’s projections, it’s expecting the global investment bank to pay a bigger dividend. This broker’s estimate for the Macquarie dividend yield is 3.3% in FY23 and 3.5% in FY24.

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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