On a soft day for the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO), where the miners are getting crunched and the banks are mixed, with National Australia Bank (ASX: NAB) down 10 cents and Commonwealth Bank of Australia (ASX: CBA) up 18 cents to $82.12, investment bank Macquarie Group Ltd (ASX: MQG) was trading up just one cent.
But that belies the bank's performance since the beginning of the 2013. Macquarie has climbed by 60% over that time, handsomely beating the index's return of 18%, and there could be more to come.
Here are three reasons for investors to stick with Macquarie…
1) Increased financial activity. Since 2013, the IPO market has returned and a steady stream of companies are lining up to list on the ASX. Macquarie makes money from trading shares on behalf of its clients, as well as earning fees for advising these companies.
2) A strong push into the mortgage market. Earlier this month, Macquarie boss Nicholas Moore said the company wanted to grow its mortgage book up from $17 billion currently to $25 billion. The bank has also taken stakes in several mortgage brokers, including Yellow Brick Road Holdings Ltd (ASX: YBR) and Homeloans Limited (ASX: HOM).
3) Growing earnings. If there's one thing that can consistently drive share prices higher, its strong growth in profits. And Macquarie is forecast to deliver double-digit growth in earnings per share over at least the next two years.
A bonus reason for shareholders to hang on is the 4.6%, partly-franked dividend. But if you want a company paying a fully franked dividend yield of 7% (grossed up), plus growing earnings and a cheap price, you need to read this report. Investors: Don't miss what could be the 'story stock' of 2014! Get The Motley Fool's #1 pick now in our newly updated investment report. It's yours FREE. Simply click here "The Motley Fool's Top Stock for 2014."
