The Insurance Australia Group Ltd (ASX: IAG) share price has lost 27% over the past five years.
From mid-2017, the insurance giant's shares were on a slow and gradual incline until the global pandemic hit.
Impacted by the fallout from COVID-19, IAG shares dropped over 30% in a space of two months in early 2020.
Since then, IAG shares have continued to sink lower, hitting a multi-year low of $4.17 at the end of last year.
When looking back at this time in May 2017, the company's shares were trading around $6.255 per share. Today, you can pick up the same shares for $4.56, almost a third 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.
So, have IAG 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.
Image source: Getty Images
IAG's dividend history
Here's a list below of the company's historical dividends paid out to shareholders in the past five years.
- October 2017 – 20 cents
- March 2018 – 14 cents
- September 2018 – 20 cents
- November 2018 – 5.5 cents
- March 2019 – 12 cents
- September 2019 – 20 cents
- March 2020 – 10 cents
- March 2021 – 7 cents
- September 2021 – 13 cents
- March 2022 – 6 cents
How much money would an investor make?
For argument's sake, let's say if you'd bought $10,000 worth of IAG shares exactly 5 years ago. You would have received approximately 1,598 shares. If we take that figure and multiply it by the current IAG share price, your current holding would be worth $7,290.16.
This means you would have made a paper loss of $2,709.84, without factoring in the accumulated dividends since October 2017.
However, when calculating the above dividends, you would have gotten a total of $1.275 for every IAG share owned. Multiply this by the current holding of 1,598 shares, this equates to $2,037.45.
Add this to the $7,290.16 that is the present value, and you would have a total of $9,327.61.
In essence, this means you would be down 6.7% having bought IAG shares in May 2017.
IAG share price snapshot
Looking at a much shorter time frame, IAG shares have lost almost 6% in the past 12 months.
However, year to date, the company's share price is in positive territory, up 7%.
IAG presides a market capitalisation of roughly $11.46 billion and has a trailing dividend yield of 4.06%.
