Have Woolworths shares been a market-beating investment over the past 5 years?

Woman thinking in a supermarket.Woman thinking in a supermarket.

The Woolworths Group Ltd (ASX: WOW) share price is one of the most well-known ASX 200 blue chips on the share market.

In addition to its presence in the top 10 largest ASX 200 shares by market capitalisation, Woolworths is also one of the most active companies in Australians’ everyday lives, thanks largely to its dominance of the Australian grocery market.

But being an everyday presence doesn’t guarantee a successful investment. So let’s take a look at how the Woolworths share price has performed in recent years compared to the S&P/ASX 200 Index (ASX: XJO).

To more accurately gauge the absolute returns of the ASX 200 (including dividend returns), let’s use an ASX 200 index fund, the iShares Core S&P/ASX 200 ETF (ASX: IOZ).

Over the five years to 30 June 2022, this ASX 200 exchange-traded fund (ETF) has returned a total of 38.24%, which works out to be an average of 9.04% per annum.

How have Woolworths shares compared to the ASX 200?

Over the same time frame, the Woolworths share price has risen from $25.54 to $35.60. That’s a cumulative return of 39.39%, or 6.86% per annum on average. But this doesn’t factor in dividend returns, of course. So Woolies has consistently commanded a dividend yield of between 2% and 3% over the past five years.

So if we throw that, plus the full franking that came with it, into Woolies’ average annual return, we would get something just ahead of the index’s return. Perhaps even more so if we account for the spin-off of Endeavour Group Ltd (ASX: EDV) that the company executed last year.

All in all, it seems Woolworths shares have been a slight market-beater over the past few years, even if not dramatically so. But still, no doubt this will come as good news for shareholders.

At the current Woolworths share price, this ASX 200 blue chip has a market capitalisation of $45.61 billion, with a dividend yield of 2.5%.

The post Have Woolworths shares been a market-beating investment over the past 5 years? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen 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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