The Macquarie Group Ltd (ASX: MQG) share price closed 0.06% lower on Friday afternoon despite closing higher for another week on the ASX. Macquarie shareholders have seen the price continue to soar in recent years including an incredible 460% rise over the last 10 years since being on the verge of bankruptcy during the GFC.
Macquarie is truly diversified
Macquarie is classified within the Diversified Financials sector and it has really lived up to its name. Macquarie's success has been due to its many revenue-generating business teams including Macquarie Capital, Macquarie Investment Management, Macquarie Corporate and Asset Finance and many more.
The group has managed to diversify across geographies too, with two-thirds of its profit in 1H18 coming from outside of Australia and New Zealand including the Americas (31%), Europe (27%) and Asia (9%).
Macquarie has been turned around over the past decade under the watchful eye of now-retired CEO Nicholas Moore, who was succeeded in December 2018 by Macquarie Asset Management stalwart Shemara Wikramanayake.
This diversification and stability have been the key behind Macquarie's continued success, as it has managed to brush off the Royal Commission concerns plaguing the other major banks around Australia to continue generating strong returns.
The fundamentals aren't much better
Whilst some might think the current valuation of $116.41 per share is lofty, giving Macquarie a $39.5 million market cap, I think there's more headroom for the share price in the near future.
Macquarie has proven it can ride the tough times, and whilst it has been dragged through the Royal Commission courtesy of its wealth management activities, I would expect to see further growth in 2019. The final report into the Royal Commission is due on Monday and it's probably best to hold off until then – what happens on Monday is anyone's guess.
I'd expect Macquarie to be hit with a hefty compensation bill in coming months but that should be already priced into the current valuation. The 45%-franked, 4.60% yield isn't the best on the market by any means, but I wouldn't be surprised to see Macquarie outperform when it reports its FY18 results in May given general market sentiment towards the banking sector.
For those Fools seeking yield, my top dividend stock for this month is Alumina Limited (ASX: AWC) which offers a fully-franked, near 10% dividend for those willing to brave the cyclical mining sector.
