Was it better to invest in ResMed shares or the ASX 200 over the past decade?
The post If you invested $1,000 in ResMed (ASX:RMD) shares a decade ago, here’s what they would be worth now appeared first on The Motley Fool Australia. –
Below, we take a look at the power of long-term investing. Let’s calculate how much you would have made if you invested $1,000 in ResMed shares a decade ago.
How does ResMed compare against the ASX 200?
On average, the ASX 200 has returned a yearly average of 5.84% to shareholders in the past decade. The most significant gain was achieved in 2019 when the index grew by 23.02%.
On the other hand, the biggest fall came in 2011, down by 10.84%. You might be thinking that 2020 would be on the list due to major COVID-19 disruptions, but the ASX 200 rebounded sharply during that year.
The healthcare company’s shares have historically outperformed the ASX 200 by a long shot, consistently treading upwards. In the past 10 years, the company has delivered a yearly average return of 30.34% since 2011.
What if you had invested $1,000 in ResMed shares 10 years ago?
If you had invested $1,000 in ResMed shares on this day 10 years ago, you would have bought them for around $2.78 each. This would have given you approximately 359 shares without factoring in any dividend reinvestments over the years.
Fast-forward to today, the current ResMed share price at the time of writing is $39.43. This means those 359 shares would now be worth an astonishing $14,155.37 (359 shares x $39.43). When considering percentage terms, this implies an upside of 1,315%.
Are ResMed shares a buy now?
Following the company’s full-year results, a number of brokers rated ResMed shares with similar price points.
Last month, Goldman Sachs raised its 12-month price target by 27% to $36.20 for the healthcare company’s shares. Macquarie soon followed, adding 7.3% to its outlook of $37.40 per share.
The most recent note came from Citi, which lifted its price on ResMed shares by 12% to $36.50.
Should you invest $1,000 in ResMed right now?
Before you consider ResMed, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and ResMed wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of August 16th 2021
Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has recommended ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.