Macquarie Group Ltd (ASX: MQG) shares are starting the week in the red.
In morning trade, the investment bank's shares are down 1.5% to $225.00.
Why are Macquarie shares taking a tumble?
The catalyst for today's decline is the bank's shares going ex-dividend this morning for its latest payout.
At the start of this month, Macquarie released its half year results. For the six months ended 30 September, the company's net profit after tax increased 14% to $1,612 million.
This was driven by strong performances from its Annuity-style businesses, which offset profit declines from its Markets-facing businesses.
This profit growth allowed the Macquarie board to increase its interim dividend year on year. It declared a partially franked (35%) interim dividend of $2.60 per share, which was up 2% on the $2.55 per share interim dividend Macquarie paid a year ago.
It is this dividend that Macquarie's shares are going ex-dividend for today.
Ex-dividend date
When a company's shares go ex-dividend, it means the rights to an upcoming dividend are now locked in and anybody buying shares from today onwards will not receive the payout.
Given that nobody wants to pay for something they won't receive, a company's shares will usually fall in line with the dividend on the ex-dividend date to reflect this.
But for those that are eligible to receive this dividend, you won't have to wait too long until pay day.
Macquarie is planning to make its payment next month on 17 December, just in time for some Christmas shopping.
Should you invest?
Bell Potter thinks investors should be snapping up the investment bank's shares.
The broker has named the company on its Australian equities panel (top picks) this month. It likes Macquarie due to the diversity of its operations and excess capital. It said:
MQG's diversification is an integral part of the investment thesis. Over the past decade, MQG has undergone a significant transformation, pivoting from its traditional investment banking roots to emerge as a dominant player in global asset management, particularly in infrastructure and renewable energy. This diversification and the potential to generate increased annuity-style income from sources like asset management should bolster MQG's valuation. MQG boasts a substantial $10.7 billion surplus capital, providing ample resources for future investments and growth.
Elsewhere, the team at Morgan Stanley has an overweight rating and $248.00 price target on its shares. Whereas Ord Minnett has an accumulate rating and $245.00 price target on them.
