The Macquarie Group Ltd (ASX: MQG) share price bounced almost 3% higher today after the investment banking giant released an updated profit outlook.
MQG share price
As can be seen above, the $29 billion bank has performed very well for shareholders in recent times. In the past five years, Macquarie's share price is up over 200%. In that time, the bank has also delivered an average dividend increase of 19% per year.
Following on from an impressive 2017 financial year, the bank this morning announced that its 2018 financial year should mark another year of improvement.
Given the nature of Macquarie's operations, which are subject to the ebbs and flows of financial markets, the group's outlook is subject to no major downturn in the economy.
Nevertheless, the bank said stronger performance fees in the first half of its current financial year are likely to flow through over the full year and push its financial results higher than last year. It said its first half will be broadly in-line with the second half of last year. During that time it delivered a net profit result of $1.16 billion and declared a final dividend of $2.80 per share.
If it posts another positive result in FY18 it will be Macquarie's 49th year of profitability.
Foolish Takeaway
Macquarie Group is Australia's largest investment banking business and a good one at that. It is globally diversified and highly profitable. However, part of its profit is subject to financial markets. Meaning, in the good times its profits grow substantially while in the bad times its profits fall quickly. That's why it may pay to be patient when buying Macquarie shares for your investment portfolio.
