The Insurance Australia Group Ltd (ASX: IAG) share price has lost 27% over the past five years.
From mid-2017, the insurance giant’s shares were on a slow and gradual incline until the global pandemic hit.
Impacted by the fallout from COVID-19, IAG shares dropped over 30% in a space of two months in early 2020.
Since then, IAG shares have continued to sink lower, hitting a multi-year low of $4.17 at the end of last year.
When looking back at this time in May 2017, the company’s shares were trading around $6.255 per share. Today, you can pick up the same shares for $4.56, almost a third cheaper than they were five years ago.
Most people assume the company’s strong bi-annual dividend payout makes up for any potential loss in share price growth.
So, have IAG shares provided value over the last five years? Below, we take a closer look to see if it has been worth investing in the company’s shares solely for its dividends.
IAG’s dividend history
Here’s a list below of the company’s historical dividends paid out to shareholders in the past five years.
- October 2017 – 20 cents
- March 2018 – 14 cents
- September 2018 – 20 cents
- November 2018 – 5.5 cents
- March 2019 – 12 cents
- September 2019 – 20 cents
- March 2020 – 10 cents
- March 2021 – 7 cents
- September 2021 – 13 cents
- March 2022 – 6 cents
How much money would an investor make?
For argument’s sake, let’s say if you’d bought $10,000 worth of IAG shares exactly 5 years ago. You would have received approximately 1,598 shares. If we take that figure and multiply it by the current IAG share price, your current holding would be worth $7,290.16.
This means you would have made a paper loss of $2,709.84, without factoring in the accumulated dividends since October 2017.
However, when calculating the above dividends, you would have gotten a total of $1.275 for every IAG share owned. Multiply this by the current holding of 1,598 shares, this equates to $2,037.45.
Add this to the $7,290.16 that is the present value, and you would have a total of $9,327.61.
In essence, this means you would be down 6.7% having bought IAG shares in May 2017.
IAG share price snapshot
Looking at a much shorter time frame, IAG shares have lost almost 6% in the past 12 months.
However, year to date, the company’s share price is in positive territory, up 7%.
IAG presides a market capitalisation of roughly $11.46 billion and has a trailing dividend yield of 4.06%.
The post The IAG share price has tumbled 27% in 5 years. Have the dividends been worth it? appeared first on The Motley Fool Australia.
Should you invest $1,000 in IAG right now?
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More reading
- How does the IAG share price stack up against analyst ratings?
- Top brokers name 3 ASX shares to sell today
- What is the dividend yield on IAG shares in May?
- The IAG share price has gained 6% in a month. Is this just the beginning?
- 4 ‘defensive growth’ ASX shares to buy in turbulent times: Wilsons
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 positions in and has recommended Insurance Australia Group Limited. 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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