How the Macquarie (ASX: MQG) share price went in 2021

Did Australia's leading investment bank put a smile on its investors' faces last year? And does the stock remain a nice purchase as 2022 starts?

| More on:
a man sits at his computer pumping his fist as he smiles widely with eyes closed and an expression of great joy as he looks at his laptop screen in his own home with a cup nearby.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The last year has been sensational for Macquarie Group Ltd (ASX: MQG) investors.

The crowning glory perhaps was that the investment firm actually became the 4th largest bank in Australia, ushering it into what many thought was an unbreakable club — the big four.

The milestone was achieved through a spectacular rise in share price over the course of 2021. 

Macquarie stocks climbed an awesome 48.3% for the 2021 calendar year. 

That's while giving out what would be a 4.4% dividend yield for those who owned Macquarie shares at the start of that period.

Macquarie shares closed 2021 on $205.40 after starting the year at $138.48.

Macquarie is the ASX share to hold for years

Perennial Value Management portfolio management director Stephen Bruce picked the share as one he would be happy to hold onto for years to come.

"If you want to pick a stock which will adapt to whatever the environment is presenting, I think Macquarie Group have demonstrated that they're an organisation that… [has] still managed to maintain that flexibility and nimbleness and adaptability to see where opportunities are and take them," he told The Motley Fool last month. 

"And similarly, to see when things are on the decline and to move out of things that have seen their best days."

While the other big banks remain static with their market dominance, Macquarie has benefitted from investor confidence in their growth prospects.

The financial powerhouse, long dubbed 'The Millionaires' Factory', is seen as heavily investing in green energy and carbon reduction themes in recent years.

Bruce told The Motley Fool that the way Macquarie invests has also slightly changed over the years.

"If we think about the outlook now and what we think it might be like in 4 years, if you continue on with the green and energy transition theme, Macquarie [has] largely invented it," he said.

"They were the leaders in infrastructure as pioneers of infrastructure-as-an-asset class. And now that's obviously becoming a very crowded space, but they've proactively moved down the value chain into greenfield developments and actually creating the assets rather than just buying them."

Macquarie shares are still good value to start 2022

This "early mover position" has Macquarie well prepared for further growth despite its valuation ballooning the past 12 months.

"It's nowhere near the value it was when it was $140, but you can make an argument that if we look at it now, it's probably operating in the best conditions you can imagine really across all of its businesses," said Bruce.

"People are fighting for infrastructure assets so prices are really, really high. There's heaps of money flowing into the funds they manage. The performance bids will be good."

Alphinity Investment Management client portfolio manager Elfreda Jonker also told The Motley Fool that Macquarie shares remain decent value.

"If you look at the valuation, it's trading on a PE [ratio] of around 19 times, so that's ahead of its long term average of around 16," she said. 

"But in our view, we do think that the way they are busy changing the business model and really just expanding the different business avenues that they're in, we think this company can continue to generate really strong earning scores, particularly over the next number of years."

Motley Fool contributor Tony Yoo owns Macquarie Group Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Financial Shares

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Financial Shares

2 rising ASX financial shares with 'meaningful upside' still left: fundie

Financials outperformed every other sector in FY25, but there are still buying opportunities left, say these experts.

Read more »

Frustrated and shocked business woman reading bad news online from phone.
Financial Shares

Macquarie shares sink 5% on Q1 update

The investment bank is having a tough start to the year.

Read more »

A man holds his baby on his lap at the dining room table while he looks at his laptop screen earnestly.
Financial Shares

After its result, does Macquarie rate AMP shares a buy, hold or sell?

The financial services company released a strong second-quarter update on Monday.

Read more »

A blockchain investor sits at his desk with a laptop computer open and a phone checking information from a booklet in a home office setting.
Broker Notes

Are non-bank lenders a lucrative alternative to the big 4 banks?

The big 4 banks are widely perceived as being fully valued or overvalued.

Read more »

Red sell button on an Apple keyboard.
Financial Shares

ASX 200 financials was the best sector of FY25. But it's time to sell these 2 stocks, say experts

The ASX 200 financials sector gave investors a near-30% total return in the 2025 financial year.

Read more »

Happy woman working on a laptop.
Financial Shares

AMP share price jumps on strong Q2 update

Let's see what the financial services company reported for the quarter.

Read more »

A woman holds up hands to compare two things with question marks above her hands.
Financial Shares

The pros and cons of buying IAG shares this month

Is this the right time to invest in the insurance giant?

Read more »

man analysing share price
Financial Shares

ASX 200 financial services rivalry: Should I buy Hub24 or Netwealth shares?

Let's compare the pair.

Read more »