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The AMP share price is down 80% over 5 years. But have the dividends paid off?

We’ve done the maths on this dividend share so you don’t have to.
The post The AMP share price is down 80% over 5 years. But have the dividends paid off? appeared first on The Motley Fool Australia. –

The AMP Ltd (ASX: AMP) share price has been a very well known clanger for ASX investors over the past five years. Perhaps due to its former size and scale, both in terms of market capitalisation, and presence on the Australian psyche, AMP’s fall from grace has been especially well documented.

As it stands today, AMP shares are trading at a price of $1.06. That’s just a hair’s breadth from the company’s 52-week (and all-time) low of $1.05. That’s also far cry from the $13-plus this company was trading at back in 1999.

This was just a few years after its demutualisation and ASX IPO. AMP is now down more than 92% from those highs, as well as down 81.72% from where it was just five years ago at $5.81 a share.

Losses like these are catastrophic for an investors’ wealth – representing a loss of 80-90 cents for every $1 invested in AMP shares.

But just like most ASX financials shares, AMP, at least until recently, was also one known as an ASX dividend heavyweight. Could these past dividends make up for these significant capital losses that investors have experienced with ‘the AMP’?

Well, let’s get the nasty stuff out of the way first. If an investor purchased $10,000 worth of AMP shares exactly five years ago, they would have received approximately 1,721 shares. Those 1,721 shares would today have a value of $1,824.40. Ouch.

But what about AMP’s dividends?

AMP’s dividends

Here is a complete summary of all of the dividends AMP Ltd has paid out since July 2016:

October 2016 – 14 cents per share
March 2017 – 14 cents per share
September 2017 – 14.5 cents per share
March 2018 – 14.5 cents per share
September 2018 – 10 cents per share
March 2019 – 4 cents per share
October 2020 – special dividend of 10 cents per share

And…. that’s it.

First of all, it’s worth noting that AMP’s dividend peaked in 2008 when the company sent 24 cents per share out the door every 6 months. It’s been more or less downhill ever since.

Secondly, it’s also worth taking into account that these dividends all came with franking credits. These were franked to 90% (with the exception of the 2020 special dividend, which was fully franked).

So, as you can probably gather, these dividends do not make up for AMP’s dismal share price performance over the past five years. But let’s see how the shortfall looks.

The dividends listed above amount to a total of 81 cents per share. So with our 1,721 shares, we would have expected to receive approximately $1,394 in dividend payments. Adding that to our capital that we have left after the past five years, and we get to a figure of $3,218.40.

So even with AMP’s dividends included, we have still lost around $6,780. Or close to 68% of our initial investment. The marginal benefits of AMP’s partial franking would narrow this gap, but only slightly.

Long story short, AMP has been a dreadful investment over the past five years, even if you include the dividend payments investors would have received over this period.

No doubt investors today would be praying that the next five years look a lot better for the AMP share price.

The post The AMP share price is down 80% over 5 years. But have the dividends paid off? appeared first on The Motley Fool Australia.

Should you invest $1,000 in AMP right now?

Before you consider AMP, 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 AMP 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 May 24th 2021

More reading

ASX 200 midday update: Lynas jumps, GPT withdraws guidance

How does the dividend for AMP (ASX:AMP) shares compare to the financial services sector?
Why the AMP (ASX:AMP) share price will be one to watch today
The AMP (ASX: AMP) share price is trailing the ASX 200 by 60% over the past year
AMP (ASX:AMP) share price slides as ASIC ends criminal proceedings

Motley Fool contributor Sebastian Bowen 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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