Macquarie Group Ltd (ASX: MQG) is a rather unique ASX 200 share. It's often called the ASX's 'fifth bank' stock for one. That's despite Macquarie having a completely different business model than other members of the big four banks. It's also colloquially known as the 'millionaire's factory'.
As most Australian investors would know, ASX bank stocks are well known for their fat — and usually fully franked — dividends.
It's not uncommon to see the likes of Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), ANZ Group Holdings Ltd (ASX: ANZ) and Commonwealth Bank of Australia (ASX: CBA) trade on dividend yields between 4% and 7% at any given time (lately under 4% in CBA's case).
In most ASX bank cases, these dividends almost always come with full franking credits attached, too. The notable exception is ANZ, which seems to have recently transitioned to paying only partially franked payouts.
So let's talk about Macquarie shares and whether ASX investors can expect a decent dividend from an investment in the ASX's 'fifth bank'.
How much in dividends from Macquarie shares?
The Macquarie share price closed yesterday at $191.97, and right off the bat, we can see it is trading on a trailing dividend yield of 3.33%.
This dividend yield comes from Macquarie's latest two dividend payments. The first is the interim dividend of $2.55 per share that investors received back in December. The second is the final dividend of $3.85 per share that shareholders are set to bag on 2 July in just over a month's time.
Both of these payments came (or will come) partially franked at 40%. As is the norm for Macquarie that we touched on earlier.
Unfortunately for investors, these dividends represent a cut on what investors enjoyed in 2022 and 2023.
Macquarie's last final payment (that investors received in July last year) was worth $4.50 per share. December 2022's interim dividend came in at $3 per share. Both of these payouts were franked at 40% as well.
If Macquarie kept its payouts at the previous year's levels over the past 12 months, its shares would sport a yield of 3.91% today.
Growth vs income
Even so, we can conclude that Macquarie shares, whilst offering decent income, don't offer the same kind of fat-paycheque potential as its big four peers do today. That's with the possible exception of CBA.
Saying that, though, Macquarie has never been a divided beast. As my Fool colleague Bronwyn masterfully laid out last week, Macquarie's returns (which are substantial) have historically come from capital growth rather than dividend income.
But Macquarie investors are the ones that have had the last laugh. As we covered then, Macquarie shares have delivered more than twice the overall returns (dividends plus growth) of CBA over the past ten years. They have also roughly quadrupled those of the worst-performing big four banks over this period – ANZ.
We can perhaps conclude that dividends aren't everything. Even for an ASX bank share.
