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%.
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.