The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price has travelled sideways over the course of the last few years.
This has led investors to believe that the banking giant is now fully valued, trading at the same levels pre-COVID-19.
Below, we calculate if the dividends have been worth the wait if a shareholder made an investment 3 years ago
What if you had invested $10,000 in ANZ shares 3 years ago?
If you had invested $10,000 in ANZ shares on this day 3 years ago, you would have bought them for around $26.52 each. This would have given you approximately 377 shares without factoring in any dividend reinvestments over the years.
Fast-forward to today, the current ANZ share price is $27.58. This means those 377 shares would now be worth around $10,397.66. When considering percentage terms, this implies a gain of just 3.9%, or an average return of 0.39% per year. This is considerably less than what the standard inflation rate is, which means your money would be worth less than this time 3 years ago.
In contrast, the ASX 200 has returned a yearly average of 5.62% to shareholders in the past 3 years.
And the dividends?
Over the course of the last 3 years, ANZ has made a total of 6 bi-annual dividend payments from July 2019 to December 2021.
Adding those 6 dividends payments gives us an amount of $3.62 per share. Calculating the number of shares owned against the total dividend payment gives us a figure of $1,364.74.
When putting both the initial investment gains and dividend distribution, an investor would have made roughly $11,762.40.
In comparison, investing the same amount in the ASX 200 would have netted you a total figure of $11,844.11.
As you can see, investing in the ASX 200 would have given you a slightly better return than parking your money in ANZ. And that’s even including the dividend payments.
No doubt, it pays off to research a company’s products/services, financial statements, projections, competitive moat and market trends before investing.
ANZ share price snapshot
Over the past 12 months, the ANZ share price has shed around 2% driven by tough trading conditions.
Its shares hit a 52-week low of $24.65 on 8 March, before quickly rebounding to the mid $27 mark.
Based on the current share price, ANZ commands a market capitalisation of around $77.32 billion.
The post The ANZ share price has gained under 4% in 3 years. Have the dividends been worth the wait? appeared first on The Motley Fool Australia.
Should you invest $1,000 in ANZ right now?
Before you consider ANZ, 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 ANZ wasn’t one of them.
The online investing service he’s run for over 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 January 13th 2022
More reading
- Fundie tells why two-thirds of all dividends come from just 7 ASX shares. Guess which ones?
- Top broker says the ANZ share price is excellent value for investors
- 5 things to watch on the ASX 200 on Wednesday
- Here’s how ANZ plans to keep ‘decision making fair’
- Why ASX 200 bank shares are storming higher today
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.
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