Is the Macquarie Group Ltd (ASX: MQG) share price a buy?
Investors certainly seem to think so, at least over the past two months. Since 21 December 2018 the Macquarie share price has risen by just over 22%. That's not bad going for one of the biggest businesses on the ASX.
The recovery of global share markets has been a big contributing factor for Macquarie's resurgence considering a majority of its earnings are derived from overseas – which is one of the main reasons why I prefer Macquarie to Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB).
A substantial amount of Macquarie's earnings generated is from capital-facing markets, which should also be boosted by the recovering markets.
The improving markets could be why Macquarie now expects an increase of profit of up to 15% in the FY19 result compared to the FY18 result.
One of the key reasons why I think Macquarie is in a much better position than it was pre-GFC is due to the development of Macquarie Asset Management, it's the largest infrastructure manager in the world. It had $532.1 billion of assets under management (AUM) at the end of December 2018.
Infrastructure management is a good area to become a leader because the earnings will be much more stable for Macquarie due to the defensive nature of infrastructure, where the asset value shouldn't decline steeply in a recession. It's also a large growth area because North America, Asia and Australia are all investing heavily in new infrastructure.
Foolish takeaway
Macquarie has grown its dividend every year since the GFC and the continued mix of earnings could mean it keeps growing faster than its other large financial peers. It has a partially franked dividend yield of 4.2%. Whilst Macquarie is attractive, I would prefer to buy it at a share price at around (or under) $100 in the current environment.
