MQG share price in focus
Macquarie Group, founded in 1969, is a global investment bank and financial services company.
Unlike other major Australian banks, Macquarie combines traditional banking with a robust asset management division, operating across sectors such as infrastructure, commodities, agriculture, real estate, and global equity markets.
Macquarie is committed to delivering consistent value to its shareholders, boasting over 55 years of uninterrupted profitability.
ZIP shares
Zip Co is a ‘fintech’ company founded in 2013. It offers a buy-now-pay-later (BNPL) service that is popular among retail consumers.
Zip’s platform allows customers to purchase items immediately and repay them over several interest-free instalments.
Like most BNPL companies, Zip makes money through transaction fees paid by the business, as well as late fees charged to customers who miss payments.
MQG share price valuation
We would consider MQG to be a ‘mature’ or ‘blue-chip’ business, so some of the metrics that could be worth considering include the debt/equity ratio, average yield, and return on equity, or ROE. These measures give us a sense of the company’s debt levels, their ability to generate returns from their assets, and their ability to consistently return profits to shareholders.
For FY24, Macquarie Group Ltd reported a debt/equity ratio of 258.5%, meaning the company is leveraged (it has more debt than equity). This can increase risk so it’s important that a leveraged company is generating stable returns and has sufficient cash flow to pay interest on its debts.
Over the last 5 years, MQG has delivered an average dividend yield of 3.2% per year. This is important to note if you’re looking for income from your investments.
Finally, in FY24, MQG reported an ROE of 10.4%. For a mature business you generally want to see an ROE of more than 10%, so MQG clears this hurdle.
As a growth company, some of the trends we might consider from ZIP shares include revenue growth, profit growth, and return on equity (ROE). I say ‘trends’ because it’s always important to look at these figures over a few years. The trend is much more valuable info than a single measure at one point in time.
Over the last 3 years, ZIP has increased revenue at a rate of 75.7% per year to hit $868m in FY24. Meanwhile, net profit has increased from -$678m to $6m. ZIP’s last reported ROE was 1.8%.
Please keep in mind that context is important – these metrics give us some indication of company performance, but it’s just the start of valuing MQG or ZIP shares. To learn more about valuation, check out one of our free online investing courses.
