Should you buy REA Group shares for the record final dividend? Here's Macquarie's recommendation

Macquarie delivers its verdict on REA Group shares following the company's strong FY 2025 results.

| More on:
A toy house sits on a pile of Australian $100 notes.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

REA Group Ltd (ASX: REA) shares enjoyed a big lift on Wednesday, closing up 6.9% at $254.50 apiece.

Investors were piling into the S&P/ASX 200 Index (ASX: XJO) online property listings company following the release of its full-year FY 2025 results.

As you can probably guess by yesterday's price action, those results were strong.

Today, there looks to be some profit-taking going on, with REA Group shares down 2.6% in morning trade, changing hands for $247.84 apiece.

Despite today's retrace, the ASX 200 real estate stock is up 30.8% since this time last year, well ahead of the 14.7% gains posted by the benchmark index over this same period.

And that doesn't include the $2.48 in fully franked dividends REA Group has paid (or shortly will) over the full year.

There's still time to grab that final dividend, which came in at an all-time high $1.38 per share. REA Group shares trade ex-dividend on 28 August, so you'd have to own the stock at market close on 27 August to receive that passive income payout.

But is the stock a good buy today?

Here's what the team at Macquarie Group Ltd (ASX: MQG) has to say.

REA Group shares: Buy, hold, or sell?

Atop the 35% increase in the final dividend, REA Group shares caught investor interest yesterday. The company achieved a 15% year-on-year revenue boost to $1.67 billion.

In other core financial metrics, earnings before interest, taxes, depreciation and amortisation (EBITDA) were up 18% from FY 2024 to $969 million. Net profit after tax (excl minorities) surged 23% to $564 million.

Those net profits came in right about where Macquarie had expected.

Looking to FY 2026, the broker forecasts NPAT (excl minorities) of $651 million, up 15% from the year just past. Macquarie expects REA Group to achieve 10% revenue growth alongside an 8% increase in costs.

And Macquarie was positive on the company's financial position.

According to the broker:

REA's balance sheet position is robust with A$429m cash, supporting increased dividends (FY25 payout ratio = 58%, +4%pts yoy), which may be sustainable moving forward; albeit is dependent on M&A

Connecting the dots, Macquarie maintained its neutral rating on REA Group shares.

The broker concluded:

REA is a high-quality business with proven sustainable growth (MQe = +16% EPS CAGR, FY25-28), albeit is trading on 51x 12-months forward P/E, a 135% premium to the ASX300 Industrials. Any disruption from competition or via the new CEO re-setting expectations may impact the multiple.

Macquarie has a 12-month price target for REA Group of $255 per share.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Real Estate Shares

Red arrow on a stand going down with wooden houses next to it.
Real Estate Shares

Down 20% in a year, can REA Group shares rebound in 2026?

Here’s what’s weighing on the stock and whether 2026 could mark a turnaround.

Read more »

A cute young girl wearing gumboots and play clothes holds open the door of her wooden cubby house as she sits and smiles in a backyard outdoor setting.
Real Estate Shares

Two ASX real estate stocks to watch in 2026

Have you considered these real estate stocks for your portfolio?

Read more »

Magnifying glass in front of an open newspaper with paper houses.
Real Estate Shares

Bell Potter favours these three real estate stocks heading into 2026

Despite interest rates likely heading higher, strong fundamentals underpin a positive outlook for these real estate companies, Bell Potter says.

Read more »

Man looking happy and excited as he looks at his mobile phone.
Real Estate Shares

Guess which ASX 200 stock is rising on $3.7b contract win

This stock is getting a lot of attention from investors on Christmas Eve.

Read more »

Rising green arrow coming out of a house.
Real Estate Shares

How does Bell Potter view this real estate stock after yesterday's 10% rise?

Can this red hot real estate stock keep rising?

Read more »

A businessman compares the growth trajectory of property versus shares.
Real Estate Shares

Dexus shares lift after property update and dividend news

Dexus has released a property valuation update and confirmed its next distribution.

Read more »

Two businessmen look out at the city from the top of a tall building.
Real Estate Shares

Are Lendlease shares a bargain after hitting fresh lows?

Brokers are not convinced.

Read more »

two businessmen shake hands amid a backdrop of tall buildings, indicating a share price movement or merger between ASX property companies
Real Estate Shares

Why are this storage outfit's shares more than 10% higher today? I'll tell you my theory

Takeover speculation has shares in this major storage company trending sharply higher.

Read more »