Why is the Macquarie (ASX:MQG) share price having such a good month so far?

The Macquarie Group Ltd (ASX: MQG) share price is up 0.54% in afternoon trading, currently at $203.06 per share.

The S&P/ASX 200 Index (ASX: XJO) is in the green as well, also up 0.63% at this same time.

But, so far in December, the Macquarie share price has outperformed the ASX 200, with Macquarie gaining 3.58% compared to a benchmark gain of 2.27%. A trend we’ve seen playing out all year.

New capital and new management

The Macquarie share price ended last month on a high note. Shares gained 1.4% on 30 November when the banker, financial advisory and fund manager announced it had closed its share purchase plan (SPP). The SPP successfully raised $1.3 billion in new capital.

The 6.8 million newly issued shares from the SPP began trading on the ASX on Monday 6 December.

The company also received a boost early this month with a new management announcement.

On 2 December the Macquarie share price finished the day up 1.5% after reporting that former Reserve Bank of Australia (RBA) governor Glenn Stevens will replace Peter Warne as the new chairman of the Macquarie board. The management handover will take place in May 2022.

What this expert said about the Macquarie share price

As part of The Motley Fool’s ongoing Ask a Fund Manager series, we interviewed Kardinia Capital’s portfolio manager Kristiaan Rehder, in mid-November. (You can find the full 2-part interview here and here.)

One of the questions we posed was, “If the market closed tomorrow for 5 years, which ASX shares would you want to hold?”

Rehder told us he thought the Macquarie share price had further to run:

It’s very hard to go past Macquarie. Macquarie’s performed very strongly. It’s a core holding of ours; we’ve held it for many years.

Its annuity business now makes up around 60% of group earnings. It’s really shifting away from being a business that was largely a market-facing business to one that’s much more stable. Its assets under management continue to grow.

It has good exposure to infrastructure and green energy. Around a $1.8 billion investment in these sectors is currently held on its balance sheet. It provides an ongoing pipeline of profits on asset sales over time. Returns across the business remain high. So it wasn’t a huge surprise to us that they launched the recent capital raising.

The sort of returns Macquarie is currently making, it certainly has the potential to create significant shareholder value through time.

Macquarie share price snapshot

The Macquarie share price has gained 45% in 2021, well outpacing the 11% year-to-date gains posted by the ASX 200.

Macquarie also pays a 3% trailing dividend yield, 40% franked.

The post Why is the Macquarie (ASX:MQG) share price having such a good month so far? appeared first on The Motley Fool Australia.

More reading

• Is the CSL (ASX:CSL) share price great value? Here’s what analysts think
• 2 ASX shares that tick all the right boxes for the long term: expert
• How did the Macquarie (ASX:MQG) share price stack up in November?
• Did the Rio Tinto (ASX:RIO) share price start a recovery in November 2021?
• Macquarie (ASX:MQG) share price gains as former RBA governor named chair

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.

from The Motley Fool Australia https://ift.tt/3ESl8Ar