Coles Group Ltd (ASX: COL) shares have underperformed the market over the last 12 months.
During this time, the supermarket giant's shares have edged 2% lower, as you can see on the chart below.
As a comparison, the S&P/ASX 200 Index (ASX: XJO) has risen by a solid 9%.
But what about the next 12 months? Will things be better for Coles shares? Let's see what a $10,000 investment in its shares could potentially turn into.
What return could you get buying Coles shares today?
While the last 12 months have been disappointing, a number of analysts believe the next 12 could be far better for investors.
But first things first, how many shares would you get with $10,000? At the current price of $18.18, you would end up with 550 shares.
Moving on, according to a note out of Citi, its analysts are positive on the company and have a buy rating and a $20.20 price target on its shares. It recently commented:
Overall, the [Automated Distribution Centre] site tour reinforces our view that Coles is moving in the right direction and the ADCs have the potential to provide a cost advantage over competitors. We are Buy rated on Coles with a A$20.20 target price.
If Citi is on the money with its recommendation, then your 550 Coles shares would be worth $11,110 by this time next year.
Don't forget the dividends
In addition, the broker is expecting Coles to pay fully franked dividends of 70 cents per share in FY 2023 and then 73 cents per share in FY 2024.
So, let's imagine that this will lead to a final dividend of 34 cents per share next month being declared next month and then a 37.5 cents per share interim dividend in February. This will mean a total of 71.5 cents per share being paid to shareholders over the next 12 months.
This would equate to a dividend income of approximately $393 from your 550 shares. If you then reinvest these dividends, the value of your investment would have grown from $10,000 to approximately $11,500 if Citi's estimates prove accurate.
That's an attractive 15% return on your original investment. Not bad!
