Invested $11,000 in Magellan shares 5 years ago? Here's how much passive income you've earned

The stock has plunged 60% since May 2018. Could the dividends have made up for it?

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Key points
  • The Magellan share price has tumbled 60% over the last five years to trade at $8.53 today
  • Fortunately, however, the company's offerings have offset a significant chunk of that loss
  • Each Magellan share has brought in $9.272 of passive income since May 2018

The last five years have been the best of times and the worst of times for the Magellan Financial Group Ltd (ASX: MFG) share price. The stock leapt to an all-time high of around $65.50 in early 2020 before plummeting to a recent low of $7.52 earlier this year.

But how has the investment played out for those who bought into the stock in May 2018?

An $11,000 investment in the funds management business back then likely would have seen a buyer walk away with 515 stocks, paying $21.33 apiece.

Today, that parcel would be worth just $4,392.95. The Magellan share price last traded at $8.53, marking a 60% tumble over the last five years.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has risen 19% in that time.

But have the dividends on offer from Magellan shares helped numb the pain brought by the stock's tumble? Let's take a look.

A young woman sits at her desk in deep contemplation with her hand to her chin while seriously considering information she is reading on her laptop.

Image source: Getty Images

All dividends paid to those holding Magellan shares since 2018

Here is all the passive income offered to those holding a single Magellan share since this time five years ago:

Magellan dividend pay dateTypeDividend amount
March 2023Interim46.9 cents
September 2022Final68.9 cents
March 2022Interim$1.101
September 2021Final$1.141
February 2021Interim97.1 cents
August 2020Final$1.22
February 2020Interim92.9 cents
August 2019Final$1.114
February 2019Interim73.8 cents
August 2018Final90 cents
Total: $9.272

As readers can see, each Magellan share has yielded $9.272 of dividends since May 2018.

That means our figurative investment has provided $4,775.08 of passive income over its life, likely reducing the sting felt as a result of the stock's suffering.

Indeed, if we consider those dividends and the stock's whopping fall, the return on investment (ROI) from our imagined $11,000 purchase comes out to a loss of nearly 16.5% – a far better outcome than it otherwise could have been.

Not to mention, all the dividends paid by the ASX 200 company in that time have been at least partially franked. That means they might have brought additional benefits for some shareholders at tax time.

And there's another silver lining to the stock's tumble. Right now, Magellan shares are trading with an outwardly impressive 13.6% dividend yield.

Motley Fool contributor Brooke Cooper 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 Scott Phillips.

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