If you’d bought $5,000 of Tesla shares 5 years ago, woohoo! Here’s how much you’d have now

We look at how much you would have netted if you’d bought the electric car company’s shares five years ago.

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Key points

  • Tesla shares have soared in value over the long run despite their recent volatility this year
  • An initial $5,000 investment in 2017  would have netted you a total of A$57,114
  • The company's shares have returned an average of 52.34% per year (from 2017) to shareholders

Despite the rollercoaster ride in 2022, the Tesla Inc (NASDAQ: TSLA) share price has rocketed throughout the past five years.

In fact, the American automotive and clean energy company’s shares have soared tenfold in value, representing strong long-term growth.

During November 2021, Tesla shares reached an all-time high of US$1,243.49 before travelling lower soon afterwards. While the company’s shares have slightly recovered, they are still some way off moving again into uncharted territory for now.

Nonetheless, let’s wind the clock back and see how much you would have made if you’d invested $5,000 in Tesla shares five years ago.

How much would your initial investment be worth now?

If you’d spent $5,000 on Tesla shares five years ago, you would have bought them for US$67.97 (A$91.13) each. That’s using the exchange rate of US$1:$A0.7458 back on 31 May 2017.

Thus, this long-term investment would have given you approximately 54 shares without topping up along the way during retracement periods.

Looking at yesterday’s market close, the Tesla share price finished at US$759.63.

This means that those 54 shares would be worth a staggering US$41,020.02 right now, or A$57,114.14 using today’s exchange rate.

In percentage terms, the initial investment implies a return of about 1,017%, or an average return of 52.34% per year.

If you are wondering about Tesla’s dividends, the company has yet to pay a percentage of its profits to date. Previously, the board decided to invest in its business and keep the balance sheet healthy.

However, Tesla will seek approval from shareholders for a stock dividend at its annual shareholders meeting later this year.

If given the go ahead, the company will be able to issue additional stock after a final approval by its board of directors.

Stock dividends, unlike cash dividends, dilute the value of each share. In layman’s terms, it’s more like a miniature stock split than a conventional cash dividend that is paid to shareholders.

Tesla share price snapshot

Over the past 12 months, the Tesla share price has gained 21% but is down almost 37% year to date.

Tesla has a price-to-earnings (P/E) ratio of 102.65 and commands a market capitalisation of a massive $787 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 positions in and has recommended Tesla. 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 Scott Phillips.

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