The board of Macquarie Group Limited (ASX:MQG) has announced that it will pay a dividend of A$2.80 per share on the 17th of December. The payment will take the dividend yield to 3.2%, which is in line with the average for the industry.

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Macquarie Group's Dividend Forecasted To Be Well Covered By Earnings

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.

Macquarie Group has a long history of paying out dividends, with its current track record at a minimum of 10 years. Taking data from its last earnings report, calculating for the company's payout ratio shows 68%, which means that Macquarie Group would be able to pay its last dividend without pressure on the balance sheet.

The next 3 years are set to see EPS grow by 32.8%. The future payout ratio could be 67% over that time period, according to analyst estimates, which is a good look for the future of the dividend.ASX:MQG Historic Dividend November 10th 2025

Check out our latest analysis for Macquarie Group

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. The dividend has gone from an annual total of A$3.30 in 2015 to the most recent total annual payment of A$6.50. This works out to be a compound annual growth rate (CAGR) of approximately 7.0% a year over that time. It's good to see the dividend growing at a decent rate, but the dividend has been cut at least once in the past. Macquarie Group might have put its house in order since then, but we remain cautious.

We Could See Macquarie Group's Dividend Growing

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. Macquarie Group has impressed us by growing EPS at 9.2% per year over the past five years. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.

Macquarie Group Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Story Continues

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 1 warning sign for Macquarie Group that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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