The Westpac (ASX: WBC) share price is down 20% in 5 years. But have the dividends paid off?

We've done the maths on this dividend share so you don't have to.

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The Westpac Banking Corp (ASX: WBC) share price has had a tough run over the last 5 years but some shareholders of the ASX 200 blue chip stock believe its dividends have covered its losses.

On 27 July 2016, the Westpac share price finished the day's trade at $30.92. Yesterday, it was sitting at $24.76 when the ASX closed.

That represents a fall of 19.92% over the last 5 years and means an investor who bought into the bank 5 years ago today would be out of pocket $6.16 apiece.

In that same time, the S&P/ASX 200 Index (ASX: XJO) has gained 34.14%.

While the Westpac share price's performance has been drab, many of the bank's shareholders keep it in their portfolio because of its dividends.

But have Westpac's dividends made up for its tumble?

A quick note:

At this point, it's worth noting that some investors likely see value in dividends despite a shares' performance.

That's because shares like Westpac give out franked dividends, which can help some investors reduce the amount of tax they pay.

All Westpac's dividends have been fully franked at 30% since 2000.

Have Westpac's dividends made up for its share price tumble?

The Westpac share price has dropped by nearly a fifth over the last half-decade.

However, Westpac routinely hands out strong dividends.

So, would an investor with a 5-year-old holding in Westpac have made back their money, or even gained some, from Westpac's dividends?

Here's a list of all dividends presented to Westpac shareholders over the last 5 years:

Westpac's dividends

  • December 2016 – 94 cents
  • July 2017 – 94 cents
  • December 2017 – 94 cents
  • July 2018 – 94 cents
  • December 2018 – 94 cents
  • June 2019 – 94 cents
  • December 2019 – 80 cents
  • June 2020 – none
  • December 2020 – 31 cents
  • June 2021 – 58 cents

The maths:

An investor who bought $10,000 worth of Westpac shares exactly 5 years ago would currently have a holding worth approximately $8007.75.

So far, this investor isn't doing too well.

However, they've received around $2370.63 worth of dividends in that time ($7.33 per share).

This means this pretend investor is approximately $378.38 better off having invested in Westpac 5 years ago.

At the end of the day, that signifies a 3.78% return. Not a bad result, and a better one than if they'd invested in Telstra Corporation Ltd (ASX: TLS) 5 years ago.

Westpac share price snapshot

While the last 5 years haven't been great for the Westpac share price, it has performed well recently.

Right now, it's 26% higher than it was at the start of 2021 and has lifted 41% since this time last year.

Motley Fool contributor Brooke Cooper 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 owns shares of 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 Bruce Jackson.

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