Has it been worth investing in Qantas shares over the long term?
The post If you invested $1,000 in Qantas (ASX:QAN) shares a decade ago, here’s what they would be worth now appeared first on The Motley Fool Australia. –
During late December 2019, the Qantas share price was hovering above the $7.30 mark, before freefalling thereafter. While the airline’s shares have somewhat recovered, they are still a long way off those previous levels.
Nonetheless, we wind the clock back and see how much an investor would have made if they had invested $1,000 in Qantas shares a decade ago.
How much would your initial investment be worth now?
If you spent $1,000 on Qantas shares exactly 10 years ago, you would have picked them up for $1.615 apiece. The purchase would deliver approximately 619 shares without reinvesting the dividends.
Looking at yesterday’s closing price, the Qantas share price finished at $5.34. This means those 619 shares would be worth $3,305.46 (619 shares x $5.34).
In percentage terms, the initial investment implies a gain of around 230.54% or a yearly average return of 12.70%. Comparing that to the S&P/ASX 200 Index (ASX: XJO), the index has given back 5.84% over a 10-year period.
And the dividends?
Over the course of the last decade, Qantas has made a total of 8 bi-annual dividend payments from 2015 to 2019. Its most recent dividend distributions have been suspended due to the pandemic severely affecting its operations and bottom line.
Adding those 8 dividends payments gives us an amount of 86 cents per share. Calculating the number of shares owned against the total dividend payment gives us a figure of $532.34 (619 shares x 0.86).
When putting both the initial investment gains and dividend distribution, an investor would have made roughly $3,837.80.
Qantas share price snapshot
Over the past 12 months, the Qantas share price has moved 30% higher and is up around 10% year to date.
Qantas presides a market capitalisation of roughly $10 billion, with more than 1.8 billion shares on its registry.
Should you invest $1,000 in Qantas right now?
Before you consider Qantas, 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 Qantas 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 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.