If you’d invested $5,000 in NAB shares just after the COVID crash, here’s what you’d have now

Investing in NAB shares 2 years ago would have reaped some serious benefits.

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Key points

  • NAB shares have soared 25% in the past 12 months 
  • An initial investment of $5,000 would have reaped almost $13,300 when including the dividend payments 
  • NAB has generated a yearly average return of 55.96% over the last two years 

The National Australia Bank Ltd. (ASX: NAB) share price rocketed to a multi-year high of $33.29 yesterday.

This is a stark contrast to when its shares were trading at a multi-decade low in March 2020. The steep fall was brought on by the COVID-19 pandemic which investors feared a deep recession.

Nonetheless, NAB shares have zoomed upwards since, creating wealth for investors who bought and held on during the tumultuous period.

Below, we calculate how much you would have made if you’d bought $5,000 worth of NAB shares since the COVID-19 crash.

How much would you have if you’d invested $5,000 since the COVID-19 crash?

If you’d invested $5,000 into NAB shares on 23 March, you would have picked them up for approximately $13.195 apiece. This equates to about 378 shares without topping up along the way.

Looking at yesterday’s closing price, the NAB share price finished at $33.25. This means that those 378 shares would now be worth $12,568.50.

Not a bad effort — almost doubling your initial investment in what is arguably one of ASX’s most safe and reliable companies. 

When looking at percentage terms, this implies an average yearly return of a whopping 55.96%.

In comparison, investing the same amount in an ASX 200 index-tracking fund would have netted you $8,320.72.

What about the dividends?

Over the course of the last two years, NAB has made a total of 4 dividend payments from July 2020 to December 2021.

Adding up those 4 dividends payments gives us an amount of $1.87 per share. Calculating the number of shares owned by the total dividend payment gives us a figure of $706.86.

When putting both the initial investment gains and dividend distribution, an investor would have $13,275.36 worth of NAB shares.

NAB share price summary

Over the past 12 months, NAB shares have surged 25% higher following positive investor sentiment in the banking industry. With the Reserve Bank of Australia looking to hike interest rates, this could lead to a stronger profit for NAB.

NAB has a price-to-earnings (P/E) ratio of 17.95 and commands a market capitalisation of roughly $107 billion.

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 no position in any of the stocks mentioned. 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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