With many quality ASX shares coming under pressure amidst the current turmoil, does the Macquarie Group Ltd (ASX: MQG) share price still offer good value to investors?
Let's examine this by reviewing Macquarie's recent quarterly financial results release.
Solid quarter in challenging market conditions
In its FY20 third-quarter update released to the market last month, Macquarie reported trading conditions were "satisfactory" across the company.
The ASX investment bank, however, noted that its Commodities & Global Markets and Macquarie Capital segments, which have a direct connection to the trading markets, saw a significant impact to net profit contribution.
Macquarie's assets under management (AUM) increased 5% in the December quarter over the prior quarter ending 30 September 2019 to $587.5 billion. Meanwhile, total deposits for Banking and Financial Services (BFS) improved 3% to $57.7 billion.
Pleasingly for the company, its Australian mortgage portfolio jumped 11% to $48.6 billion. With this, Macquarie appears to be gaining market share from its major competitors which no doubt includes the big four Aussie banks.
Macquarie is predicting that its result for FY20 will be slightly down on FY19, which provides further weight to the challenging market conditions the company is currently facing.
Are Macquarie shares a buy?
I believe that the current market volatility could potentially impact Macquarie's business performance over the next few months, particularly its asset management division. Macquarie also has a strong link to the global economy and with the current market unrest and uncertainty, its share price may come under more pressure in the months to come.
In saying that, over the past few years, Macquarie has become a more balanced and diversified business rather than one heavily focused on a small core group of operations. This was one of the reasons why the Macquarie share price was hit so hard during the GFC. So, I believe the company is in a much better position to weather any storm this time around.
Foolish takeaway
In my opinion, Macquarie is still a good choice for both growth and income, and is well placed to outperform the S&P/ASX 200 Index (INDEXASX: XJO) over the next 5 to 10 years.
Macquarie has also outperformed the big four banks over the last 10 years with regards to annual profitability growth, which has flowed through to increasing dividends. As such, I think Macquarie still remains a good ASX share to add to a diversified portfolio.
