The Woodside share price has gained under 5% in 10 years. Does the latest monster dividend make up for this?

Despite bumps along the way, the Woodside Energy Group Ltd (ASX: WDS) share price is flat over the past 10 years.

Indeed, a few market shocks set back the energy producer’s shares, particularly the onset of COVID-19. This caused panic among oil markets as the global economy came to a grinding halt. Even so, the price of oil briefly went into negative territory for the first time in history.

Nonetheless, Woodside shares have been in the spotlight more recently given that energy prices have accelerated. The share price has rebounded to pre-pandemic levels and could even go higher depending on how energy markets play out.

Looking back on 6 September 2012, the company’s shares were trading at $34.54 per share.

Today, Woodside shares are swapping hands at $35.01.

Most people assume the company’s strong bi-annual dividend payout makes up for any stalled or negative growth in a share price.

Further strengthening the above argument, the Woodside board traditionally pays fully-franked dividends.

Franking credits, otherwise known as imputation credits, are highly regarded in the investing world. This is a type of tax credit that is passed onto shareholders when dividend payments are made by a company. Essentially, the company is paying the tax on the dividends received by the shareholders.

So, does Woodside’s monster dividend make up for the share price remaining flat in the past decade? Let’s take a look to see if it has been worth investing in the company’s shares solely for its upcoming dividend.

Does the Woodside dividend make up for the flat share price?

For argument’s sake, let’s say you bought $10,000 worth of Woodside shares exactly 10 years ago. You would have received approximately 289 shares.

If we take that figure and multiply it by the US109 cent (A$1.60) per share final dividend Woodside is offering, you’d get around $462.40 as a dividend payment.

Added with the current valuation of your Woodside holdings, you’d be on $10,580.29 or $580.29 profit in 10 years. This translates to an average return of 0.57% per year.

In comparison, if you invested in an ASX 200 index-tracking fund, you’d have gotten back a yearly average of 4.82%.

As you can see, the Woodside monster dividend, in my eyes, does not make up for the company’s share price performance over the last 10 years.

Woodside share price snapshot

Looking at a much shorter time frame, Woodside shares have gained 80% in the past 12 months.

Year to date, the company’s share price is also in positive territory, up 60%.

Woodside presides a market capitalisation of roughly $67 billion, making it the eighth largest company on the ASX.

The post The Woodside share price has gained under 5% in 10 years. Does the latest monster dividend make up for this? appeared first on The Motley Fool Australia.

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More reading

• How are ASX 200 energy stocks performing on Tuesday?
• Here are the top 10 ASX 200 shares today
• Why is the Woodside share price surging ahead on Monday?
• 5 things to watch on the ASX 200 on Monday
• Are ASX 200 energy shares a good investment right now?

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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