The Macquarie Group Ltd (ASX: MQG) share price has risen by 17% over the past year and is almost at its all-time high, so it's worth considering if today's price is a buy.
Compared to most of the other ASX20 shares, particularly the big four banks, I think Macquarie Group has superior business prospects. The only business that is perhaps better than Macquarie Group is CSL Limited (ASX: CSL).
I believe that Macquarie's diverse global earnings is a very attractive feature of the financial company. In its half-year report it disclosed that 62% of income was generated outside of Australia and New Zealand. I think this diversification alone puts it higher than the other banks.
I like that a lot of Macquarie's earnings are generated from its self-described 'annuity-style' businesses that generate regular earnings and shouldn't suffer as much in a crash. This should mean that in the next local or global recession that Macquarie's earnings and share price hold up better because it has shifted away from capital-facing market earnings.
Another strong reason to like Macquarie is that it is focusing on the infrastructure and 'green' investment booms.
Macquarie believes that US$45 trillion investment into infrastructure will be required globally by 2030. It thinks there will be around one billion people moving to an urban area by 2030 and that there will be a 50% increase in GDP per capita, which will drive the need. It also points to the need for investment in water, electricity and roads. Asia in-particular needs infrastructure investment.
The company also points to a 30% increase of energy demand by 2030 and that there will be US$4 trillion invested into renewable power generation by 2030.
Foolish takeaway
I think Macquarie is very forward thinking and knows which way the money will be flowing. I'm glad it isn't just focusing on the Australian mortgage market, which could suffer in the near future. It's currently trading at 14x FY18's estimated earnings.
I think Macquarie could be a decent long-term buy at today's price, but it could suffer heavily in the next recession and that would be a great opportunity to buy.
