The AMP Ltd (ASX: AMP) share price has travelled lower over the past decade, while the S&P/ASX 200 Index (ASX: XJO) has surged.
Nonetheless, we wind the clock back and see how much an investor would have made if they had invested $10,000 in AMP shares a decade ago.
How much would your initial investment be worth now?
If you spent $10,000 on AMP shares exactly 10 years ago, you would have picked them up for $4.26 each. The purchase would deliver approximately 2,347 shares without reinvesting the dividends.
Looking at Monday's closing price, the AMP share price finished at $94.5 cents. This means those 2,347 shares would be worth a measly $2,217.91.
In percentage terms, the initial investment implies a loss of around 77.8% or a yearly average negative return of 13.98%. Comparing that to the ASX 200, the benchmark index has given back 5.52% over a 10-year period.
And the dividends?
Over the course of the last decade, AMP has made a total of 16 dividend payments from 2012 to 2020. Its most recent dividend distributions were halted due to the pandemic severely affecting its operations and bottom line.
Adding those 16 dividends payments gives us a total amount of $1.97 per share. Calculating the number of shares owned against the total dividend payment gives us a figure of $4,623.59.
When putting both the initial investment gains and dividend distribution, an investor would have $6,841.50.
This means that not only your investment would have lost a considerable amount, but also it would be worth less today. This is because of inflationary movements in which the value of $1 is worth less than the price tomorrow.
Another factor to take in would be the time and opportunity cost in which an investor could have grown their money elsewhere. In particular, the ASX 200 over a 10-year period with the same initial investment would have netted $17,108.57.
AMP share price snapshot
Over the past 12 months, the AMP share price has moved 32% lower and is down 6% year to date.
AMP has a price-to-earnings (P/E) ratio of 18.17 and commands a market capitalisation of roughly $3.09 billion.
