For over two decades, Telstra Corporation Ltd (ASX: TLS) shares have been among the most popular options for income investors on the ASX 200 index.
However, there's no getting away from the fact that the last few years have been tougher than normal for shareholders.
The arrival of the NBN led to the removal of its landlines from homes and created a major gap in its earnings. This unfortunately put pressure on its earnings and ultimately its dividends.
But would an investment five years ago still have been worth it? Let's take a look at what a $5,000 investment would have generated for investors.
How would a $5,000 investment in Telstra shares five years ago have fared?
Five years ago, the Telstra share price was fetching $3.52. This means that if you had invested $5,000 into its shares, you would have received 1,452 shares.
Firstly, with the telco giant's shares currently trading at $3.85, these shares would now have a market value of approximately $5,590. So, while this is not a great start, at least there is some form of return here before dividends.
As for dividends, here's what Telstra paid during the last five financial years:
- FY 2018: 22 cents per share
- FY 2019: 16 cents per share
- FY 2018: 16 cents per share
- FY 2018: 16 cents per share
- FY 2018: 17 cents per share
That's a total of 87 cents per share in fully franked dividends over the five years. If we multiply this by the 1,452 shares you received from your investment, this equates to total dividends of $1,263.24.
This brings the value of your total investment to $6,853.24, which represents a 37% total return for investors over the five years.
This is actually better than the market, which based on the ASX 200 accumulation index (which includes dividends), has generated a return of approximately 35% over the last five years.
So, all in all, Telstra shares have proven to be a decent investment despite all the NBN disruption.
