When investing in a blue-chip company, you would expect to reap at least modest returns over the long term.

However, this hasn’t been the case with the Telstra Corporation Ltd (ASX: TLS) share price.

Since 2017, the telco provider’s shares have logged wild price swings of around 35% in either direction.

And despite starting 2022 at a multi-year high of $4.31, the share is down 4% over the past five years.

Nonetheless, most people assume the company’s bi-annual dividend payout makes up for any potential loss in share price growth.

So, has the Telstra dividend provided value over the last five years to make up for the share price loss?

Let’s take a look.

What if you had invested $10,000 in Telstra shares 5 years ago?

If you bought $10,000 worth of Telstra shares five years ago, you would have got them for $4.13 each. This would have given you approximately 2,421 shares without factoring in any dividend reinvestments over the years.

Fast-forward to today, the current Telstra share price is $3.94. This means those 2,421 shares would now be worth around $9,538.74 – a loss of $461.26.

In contrast, an ASX 200 index-tracking fund would have given back 18.7% since 2017 or a yearly average of 3.49%.

But what about the Telstra dividends?

Over the last five years, Telstra has made 10 bi-annual dividend payments from September 2017 to April 2022.

Calculating those dividends gives us an amount of 93.5 cents per share. This means that with the 2,421 shares owned, you’d have made $2,263.64.

When putting both the initial investment gains and dividend distribution, you’d be sitting on $11,802.38.

As you can see, investing in Telstra may have incurred a small loss, but the dividends would be making up for it.

Telstra share price snapshot

Over the past 12 months, the Telstra share price has risen around 4%, despite riding through harsh macroenvironmental conditions.

Based on the current share price, Telstra commands a market capitalisation of around $46.33 billion.

The post The Telstra share price has lost 4% over the past 5 years. Have the dividends been worth it? appeared first on The Motley Fool Australia.

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More reading

• Analysts name 2 top ASX 200 dividend shares to buy
• Are Telstra shares still worth holding for dividend income today?
• This fund manager just bought more of these 2 ASX 200 blue-chip shares
• ASX 200 midday update: Telstra completes acquisition, Lake Resources and Bega Cheese sink
• Telstra share price higher on Digicel Pacific acquisition completion

Motley Fool contributor Aaron Teboneras has positions in Telstra Corporation Limited. 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 Telstra Corporation 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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