Despite sinking over the past month, the Pilbara Minerals Ltd (ASX: PLS) share price has returned unbelievable gains over the decade.
Arguably, investing your money in businesses that are either new to the market or emerging can make you seriously rich. Of course, there is an inherent risk, particularly given when a company is still finding its footing.
Nonetheless, we calculate how much you would have made if you’d bought $10,000 worth of Pilbara Minerals shares a decade ago.
How much would your initial investment be worth now?
If you’d invested $10,000 into Pilbara Minerals shares this time 10 years ago, you would have picked them up for approximately 2 cents apiece. This equates to about 500,000 shares without topping up along the way.
Fast-forward to today, Pilbara Minerals shares are exchanging hands at $2.56 at the time of writing. This means that those 500,000 shares would be now worth a staggering $1.28 million. That’s right! A $10,000 investment in Pilbara Minerals shares and letting time do the work would reap some serious rewards.
When factoring in percentage terms, this implies an incredible gain of 12,600% or an average yearly return of 62.45%.
In comparison, investing the same amount in an ASX 200 index-tracking fund would have given back 62.72% over 10 years. This equates to an average of 4.99% per year.
If you are wondering about the Pilbara Minerals dividends, the company has chosen not to pay a percentage of its profits to date. Instead, it has decided to invest in its business and keep the balance sheet healthy in times of commodity downturns.
And without doubt, that decision by management has paid off for long-term shareholders.
Pilbara Minerals share price summary
Regardless of the recent slump, the Pilbara Minerals share price has continued to accelerate by 114% over the past 12 months.
The company’s shares hit an all-time high of $3.89 in mid-January before treading lower in the following weeks. One can only imagine how much you’re initial $10,000 investment would be then.
Spoiler alert: It would have been close to $2 million at the peak!
Pilbara Minerals presides a market capitalisation of roughly $7.62 billion and has more than 2.97 billion shares on its registry.
Should you invest $1,000 in Pilbara Minerals right now?
Before you consider Pilbara Minerals, 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 Pilbara Minerals 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
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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 Scott Phillips.
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