The Bank of Queensland share price has lost 30% in 5 years. Have the dividends been worth it?

We calculate below to see if the bank’s dividends have been worthwhile…

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Key points

  • Bank of Queensland shares have fallen 30% over the past five years
  • Since May 2017, the company's dividends have totalled $2.98, while the share price has fallen by around $3.76 per share
  • If an investor made a $10,000 investment in Bank of Queensland, the current value would be roughly $9,300

The Bank of Queensland Ltd (ASX: BOQ) share price has lost more than 30% over the past five years.

From late 2017, the bank’s shares continued on a slow and gradual decline until the global pandemic hit.

Impacted by the heavy fallout from COVID-19, Bank of Queensland shares dropped to a multi-year low in March 2020.

Since then, the Bank of Queensland share price has recovered to pre-pandemic levels, before giving away its gains over the last six months.

On 27 April 2017, the company’s shares were trading at $11.64 per share. Today, you can pick up the same shares for $7.88, more than 32% cheaper than they were five years ago.

Most people assume the company’s strong bi-annual dividend payout makes up for any potential loss in share price growth.

Further strengthening that argument, the Bank of Queensland board traditionally pays fully-franked dividends.

Franking credits, otherwise known as imputation credits, are highly regarded in the investing world. This is a type of tax credit passed onto shareholders when dividend payments are made by a company. Essentially, the company is paying the tax on the dividends received by the shareholders.

So, have Bank of Queensland shares provided value over the last five years? Below, we take a closer look to see if it has been worth investing in the company’s shares solely for its dividends.

Bank of Queensland’s dividend history

Here’s a list below of the company’s historical dividends paid out to shareholders in the past five years.

  • May 2017 – 38 cents
  • November 2017 – 46 cents
  • May 2018 – 38 cents
  • November 2018 – 38 cents
  • May 2019 – 34 cents
  • November 2019 – 31 cents
  • November 2020 – 12 cents
  • May 2021 – 17 cents
  • November 2021 – 22 cents
  • May 2022 – 22 cents

How much money would an investor make?

For argument’s sake, let’s say an investor bought $10,000 worth of Bank of Queensland shares exactly five years ago. They would have received approximately 859 shares. If we take that figure and multiply it by the current Bank of Queensland share price, the investor’s holding would be worth $6,768.92.

This means that an investor would have made a paper loss of $3,231,08, without factoring in the accumulated dividends since May 2017.

However, when calculating the above dividends, our investor would have gotten a total of $2.98 for every Bank of Queensland share owned. Multiply this by the current holding of 859 shares, this equates to $2,559.82.

Add this to the $6,768.92 that is the present value, and the investors would have a total of $9,328.74.

In essence, this means our investor would be down 6.7% having bought Bank of Queensland shares from April 2017.

Bank of Queensland share price snapshot

Looking at a much shorter time frame, Bank of Queensland shares have lost 14% in the past 12 months.

Year to date, the company’s share price is also in negative territory, down 2%.

Bank of Queensland presides a market capitalisation of roughly $5.08 billion, making it the 98th largest company on the ASX.

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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