Home / Sector / Financial Shares / If I buy $10,000 of Macquarie shares right now, how much passive income will I receive?

If I buy $10,000 of Macquarie shares right now, how much passive income will I receive?

The investment bank could continue to be a cash machine for investors.

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Key points

  • Diversified earnings are helping Macquarie’s profit
  • It continues to pay a healthy amount of profit to shareholders as a dividend
  • A $10,000 investment could pay a passive income of around $380 of cash dividends in FY24

Macquarie Group Ltd (ASX: MQG) shares are known for paying good dividends to shareholders. In this article we’re going to look at how much passive income Macquarie shares might pay in the shorter term.

The S&P/ASX 200 Index (ASX: XJO) share operates as a global investment bank across the world. There are four main operating segments, which gives it earnings diversification: investing banking, asset management, commodities and global markets (CGM), and banking and financial services (BFS).

Recent commodity volatility has allowed the business to continue to make good profits, namely through the CGM division. This is allowing it to keep paying attractive dividends, with a healthy dividend payout ratio.

In FY23, the business made a net profit of A$5.2 billion, which was up 10% on FY22. Its FY23 annual ordinary dividend was A$7.50 per share, which represented an FY23 dividend payout ratio of 56%.

How much passive income will Macquarie shares pay in FY24?

Using the estimates on Commsec, a profit and dividend reduction are expected in FY24.

The earnings per share (EPS) could be $11.59, which could then fund an annual dividend per share of $6.69. The passive income from Macquarie is expected to be around 10% lower.

At the current Macquarie share price, this would represent a partially franked dividend yield of 3.8%.

I’ll mention that the current dividend estimate for FY25 is $7.15 per share, which would represent a year over year increase of 6.9%.

Dividend example with a $10,000 investment

With how much a single Macquarie share costs (at currently $174.83), we’re not going to be able to buy too many shares with $10,000. It would currently afford 57 Macquarie shares.

Therefore, with 57 Macquarie shares, we’d be able to get $381.33 of cash dividends from FY24, with a little bit of franking credits on top.

If we think about the possible payment in FY25, then the 57 Macquarie shares might be able to pay $407.55 of total dividends.

With the business investing for more growth each year, this could help fund higher dividend payments in future years.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. 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 positions in and 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.

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