Today is a good day to own Macquarie Group Ltd (ASX: MQG) shares for a couple of reasons.
The first reason is that the investment bank's shares are currently up almost 1% to $227.24.
This compares favourably to a gain of 0.65% to 8,303 points.
What else makes it a good day to own Macquarie shares?
The main reason why Macquarie shareholders are likely to be smiling on Tuesday is that today is pay day for them if they are eligible to receive the investment bank's latest dividend.
Last month, the company released its half year results and reported solid profit growth on an annual basis during the six months ended 30 September. Macquarie reported a 14% increase in net profit after tax to $1,612 million.
This was driven by strong performances from its Annuity-style businesses, which offset profit declines from its Markets-facing businesses.
Commenting on the six months, the investment bank's CEO, Shemara Wikramanayake, said:
Macquarie's improved performance this half year was underpinned by improved realisations in Macquarie Asset Management and further progress in the digitalisation programme in Banking and Financial Services, reflecting the ongoing benefits of our diverse business mix.
This allowed Macquarie to declare a partially franked (35%) interim dividend of $2.60 per share. This was up 5 cents or 2% on the $2.55 per share interim dividend it paid a year ago.
This dividend is on its way to eligible shareholders today. It equates to a modest 1.15% dividend yield at current prices.
What's next for shareholders?
According to a note out of Bell Potter, its analysts are forecasting a dividend yield of 2.8% for the full year.
They also think that its shares could be worth buying at current levels and have named them on the broker's Australian equities panel in December. These are shares that Bell Potter believes offer attractive risk-adjusted returns over the long term.
The broker also notes that it considers the current macro-economic backdrop and investment environment when making its picks, focusing on quality companies with proven track records, strong management teams, and competitive advantages.
Commenting on Macquarie's position on the list, Bell Potter 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.
