The ResMed Inc (ASX: RMD) share price has enjoyed strong returns over the past 10 years, up 1,300%. In comparison, the S&P/ASX 200 Index (ASX: XJO) is up around 80% over the same time frame.
Below, we take a look at the power of long-term investing. Let's calculate how much you would have made if you invested $1,000 in ResMed shares a decade ago.
Image source: Getty Images
How does ResMed compare against the ASX 200?
On average, the ASX 200 has returned a yearly average of 5.84% to shareholders in the past decade. The most significant gain was achieved in 2019 when the index grew by 23.02%.
On the other hand, the biggest fall came in 2011, down by 10.84%. You might be thinking that 2020 would be on the list due to major COVID-19 disruptions, but the ASX 200 rebounded sharply during that year.
The healthcare company's shares have historically outperformed the ASX 200 by a long shot, consistently treading upwards. In the past 10 years, the company has delivered a yearly average return of 30.34% since 2011.
What if you had invested $1,000 in ResMed shares 10 years ago?
If you had invested $1,000 in ResMed shares on this day 10 years ago, you would have bought them for around $2.78 each. This would have given you approximately 359 shares without factoring in any dividend reinvestments over the years.
Fast-forward to today, the current ResMed share price at the time of writing is $39.43. This means those 359 shares would now be worth an astonishing $14,155.37 (359 shares x $39.43). When considering percentage terms, this implies an upside of 1,315%.
Are ResMed shares a buy now?
Following the company's full-year results, a number of brokers rated ResMed shares with similar price points.
Last month, Goldman Sachs raised its 12-month price target by 27% to $36.20 for the healthcare company's shares. Macquarie soon followed, adding 7.3% to its outlook of $37.40 per share.
The most recent note came from Citi, which lifted its price on ResMed shares by 12% to $36.50.
