Here’s what $10,000 worth of Westpac (ASX:WBC) shares bought 10 years ago looks like today

We look how much an investor would have pocketed if they bought Westpac shares 10 years ago.

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Key points

  • Westpac shares have gained around 12% in value over the past decade
  • When factoring in dividends, an initial investment of $10,000 would have reaped almost $19,000
  • The ASX has generated a yearly average return of 5.56% over the last decade compared to 1.16% for Westpac

The Westpac Banking Corporation (ASX: WBC) share price has travelled sideways over the past decade.

In comparison, the S&P/ASX 200 Index (ASX: XJO) has zoomed higher across the same timeframe.

During 2020, Westpac shares fell to a decade low of $13.47 after the worldwide pandemic shocked global markets. Since then, the bank’s shares have somewhat recovered, however, they are still some way off reaching their pre-COVID-19 highs.

Nonetheless, let’s take a look and see how much an investor would have made if they had invested $10,000 in Westpac shares a decade ago.

How much would your initial investment be worth now?

If you spent $10,000 on Westpac shares exactly 10 years ago, you would have picked them up for $21.03 each. The purchase would deliver approximately 475 shares without reinvesting the dividends received from the company.

Looking at yesterday’s closing price, the Westpac share price finished at $23.62. This means those 475 shares would be worth $11,219.50.

In percentage terms, the initial investment implies a return of 12.2% or a yearly average return of 1.16%. Comparing that to the ASX 200, the benchmark index has given back 5.56% over a 10-year period.

What about the dividends?

Over the course of the last decade, Westpac has made a total of 21 dividend payments including 2 special dividends from 2012 to 2022. It’s worth noting that the last few dividend distributions were significantly reduced due to the pandemic severely affecting the company’s operations and bottom line.

Adding those 21 dividend payments gives us an amount of $16.16 per share. Calculating the number of shares owned against the total dividend payment gives us a figure of $7,676.00.

When putting both the initial investment gains and dividend distribution, an investor would have a total amount of $18,895.50.

As you can see from above, the dividends made up for the sagging Westpac share price over the decade.

In particular, the major banks have always been well regarded as strong dividend payers to investors.

Westpac share price snapshot

Over the past 12 months, the Westpac share price has travelled 4% lower but is up 10% year to date.

Westpac presides a market capitalisation of roughly $82.69 billion, making it the third-largest bank by value.

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 recommended Westpac Banking Corporation. 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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