Macquarie Group vs Commonwealth Bank: Which ASX bank is the better buy?

Macquarie Group vs Commonwealth Bank shares: Which bank is best on the ASX?

Everyday Aussie investors often find themselves weighing up Macquarie Group Ltd (ASX: MQG) against Commonwealth Bank of Australia (ASX: CBA). Both have a long pedigree, blue-chip status, and deliver reliable dividends, but their businesses and profiles are starkly different. With current market conditions in mind, let’s see how Macquarie and CommBank stack up and which could be the better buy.

The case for Macquarie Group

Macquarie Group is a global powerhouse headquartered in Australia, best known for its investment banking, asset management, and specialist expertise in areas like infrastructure, resources and commodities. While it’s sometimes referred to as Australia’s fifth-largest bank by market cap, retail banking is only a small piece of Macquarie’s business. According to its most recent public description, Macquarie operates in 34 markets worldwide, offering everything from banking to investment and advisory services, and ranks within the world’s top 50 asset managers.

A few standouts in the latest numbers:

• Market cap: $91.54 billion
• P/E ratio: 18.83, notably lower than CommBank’s
• Dividend yield: 2.93% (unfranked portion may matter for some investors)
• EPS: 12.669
• Partial franking: 35%
• Year to date return: 19.5%

Dividends have grown over time, with the most recent final and interim payouts at $4.20 and $2.80 per share, both franked at 35%. Macquarie’s more global and diversified earnings base could appeal if you want exposure beyond Aussie retail banking.

The case for Commonwealth Bank of Australia

Commonwealth Bank (or CommBank) is a household name and part of Australia’s “big four” banking club. Its business is all about integrated financial services, spanning retail and business banking, funds management, super, insurance, and more. CommBank operates mainly in Australia and New Zealand, but its reach extends to several international markets too.

Here’s what stands out from the data:

• Market cap: $255.09 billion, making it much larger than Macquarie
• P/E ratio: 23.39
• Dividend yield: 3.31%, slightly higher than Macquarie’s
• EPS: 6.517
• Franking: a full 100%
• Year to date return: -1.92%

CommBank’s dividend history is a thing of beauty for income lovers. Payouts are fully franked, and dividends have remained consistent, with the last final and interim payments coming in at $2.70 and $2.35 per share. For those who value steady, reliable yield with maximum franking credits, CommBank is hard to go past.

Valuation comparison

These two banks share the same broad sector but look quite different through a value lens. Here’s how some core numbers compare:

Note: Macquarie Group’s reported P/E and EPS figures align, but when comparing across such different business models—even within the banking sector—it’s not always apples-to-apples. CommBank’s full franking on its higher yield may also make its dividends more attractive to some investors, especially those in higher tax brackets.

Recent share price performance

Comparing 21 August to 18 September 2026:

• Macquarie Group shares fell from $248.43 to $238.62, a drop of roughly 3.9% in that time.
• Commonwealth Bank shares slipped from $157.99 to $152.43, down around 3.5% over the same period.

On a year-to-date basis, the difference is sharper:

• Macquarie Group is up 19.5% YTD.
• Commonwealth Bank is down 1.9% YTD.

Which is the better buy?

If I’m weighing Macquarie Group against Commonwealth Bank today, my pick would be Macquarie Group. Its momentum stands out, with an impressive 19.5% year-to-date return, which easily trumps CommBank’s negative move for 2026 so far. Macquarie also looks meaningfully cheaper on a P/E basis (18.8 vs 23.4), giving you more earnings for every dollar invested.

While CommBank pays a higher headline yield (3.31% vs 2.93%) and offers the full benefit of 100% franking, which is unbeatable for franked income lovers, Macquarie’s growth-style profile and sector diversification appeal to me more in the current market. Its slightly lower dividend and franking rate may disappoint some, but that’s balanced by capital gains and global exposure.

For investors seeking a combination of growth potential and a decent, partly franked dividend, I think Macquarie looks like the more compelling opportunity right now. Of course, if fully franked, reliable income is your absolute priority, you might still lean towards CommBank.

The post Macquarie Group vs Commonwealth Bank: Which ASX bank is the better buy? appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.