The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price has gone on a rollercoaster ride over the last couple of years. However, you may be wondering if you had invested 10 years ago in the airport operators shares, would you be in the green?
No doubt, Sydney Airport has been a hot topic since COVID-19 began in March 2020. The company was once considered a safe and defensive blue-chip share but turned out to be vulnerable during the pandemic.
This is due to Australians being banned from flying internationally, along with severe passenger caps on returning citizens. Interstate borders have also been closed from time to time when there are local COVID-19 outbreaks in population centres.
Quick take on Sydney Airport
Considered as one of the country’s most important infrastructure assets, Sydney Airport is the gateway between Australia and the world.
Before the pandemic, the airport operator was used by 44.4 million passengers, contributing $38 billion in economic activity each year. This is equivalent to roughly 6.8% of the New South Wales economy.
How has the Sydney Airport share price performed in 2021?
Over the last 8 months, Sydney Airport shares have been moving mostly sideways until the company received a takeover proposal. The offer put forward an indicative price of $8.25 cash per Sydney Airport share.
When the news broke out, the Sydney Airport share price flew to a 52-week high of $8.04. Although in the weeks following, the airport’s board unanimously concluded that the proposal undervalues the company. As such, the board recommended it was not in the best interests of shareholders to proceed with the deal.
Since then, Sydney Airport shares have moved slightly lower, following profit taking by investors.
What would be the value of Sydney Airport shares buying from 10 years ago?
If you had parked $2,000 in Sydney Airport shares in 2011, you would have bought them for around $3.07 a piece. This translates to approximately 651 shares without including reinvesting the dividends.
Fast-forward to today, the current Sydney Airport share price is at $7.63. This means that those 651 shares would be worth $4,967.13 (651 shares x $7.63). When looking at percentage terms, this implies an upside of about 148%, or on average a 14.8% yearly return.
Is Sydney Airport share a buy today?
A number of brokers rated the company with similar price points following the takeover proposal.
Macquarie raised its 12-month price target by 41% to $8.50 for Sydney Airport shares. Days after, both JP Morgan and Citi also increase their rating, up 45% and 25%, respectively to $8.25 per share.