Diversification to deliver impressive profit growth and income
Macquarie Group Limited (ASX:MQG)
Macquarie Group Limited (MQG) is Australia’s largest investment bank and a global leader in infrastructure development investment.
Its diversified operations (both geographically and by business type) offer some hedge against current conditions, with trading activities likely buoyed by volatility and potential for gains as rising asset values will, in time, assist asset management and recycling profitability.
Clearly, some areas of MQG’s operations will also be under pressure, however, we are attracted to the group’s conservative balance sheet (over $5bn in excess capital), and recent execution suggests it can maintain strong performance through the cycle. The recent profit upgrade will now see profits up 5-10% this year from previous guidance of slightly down.
The diversification of the MQG business has come to the fore and will help deliver impressive profit growth and income outcome when they report in May.
We see the group well-positioned to capitalise on opportunities on the other side of COVID-19.
This article has been prepared for the general information of investors and not having regard to any particular person’s financial situation, objectives, or needs. Accordingly, in so far as any information may constitute advice (whether express or implied), it is general advice and no recipient should rely upon it without having obtained specific advice from their advisor at Baker Young Limited. Baker Young Limited makes no representation, gives no warranty, and does not accept any responsibility for the accuracy or completeness of any recommendation, information, or advice contained herein. To the extent permitted by law, Baker Young Limited will not be liable to the recipient or any other persons in contract, in tort, or otherwise for any loss or damage (including indirect or consequential loss) as a result of the recipient, or any other person acting or refraining from acting in reliance on any recommendation, information or advice herein. Baker Young Limited or persons associated with it may have an interest in the securities or financial products mentioned in this document and may earn brokerage and other fees as a result of transactions in any such securities. Australian Financial Services Number 246735.