Invested $5,000 in Woodside shares in 2021? Here’s how much passive income you’ve made

Invested $5,000 in Woodside shares in 2021? Here's how much passive income you've made

Woodside shares delivered a record final dividend in 2023, delighting passive income investors.

Bernd Struben

Author bio Bernd Struben earned his BA in economics from the University of Michigan in 1991, with post-graduate studies in environmental economics at the University of Connecticut. Over the years he’s written about and analysed the tourism industry in the Caribbean; Europe’s commercial real estate markets; and, since moving to Australia in 2010, global and Aussie share markets. Bernd studies geopolitical and macroeconomic trends, alongside sector and company specific data, to gauge what he believes could be tomorrow's best investments. In his free time, you might find Bernd at the beach with his family or working on his next science fiction novel. Areas of expertise Australian and global share markets Macroeconomic and geopolitical trends Real estate Education Economics, University of Michigan Favorite investment quote "The four most dangerous words in investing are: 'This time it's different." — Sir John Templeton

Published September 27, 2024 4:30 am AEST

2021 wasn't the best year to own Woodside Energy Group Ltd (ASX: WDS) shares for passive income.

Brent crude oil traded for just US$52 per barrel in early January 2021 and in the mid-US$60 per barrel range for much of the year, restraining Woodside's profits and dividends.

2022 was a different story entirely, with Brent crude oil topping US$122 per barrel in June of that year.

This saw the Woodside share price and the company's passive income payouts soar in 2022 and into 2023. In April 2023, shareholders will have received Woodside's all-time high, fully franked dividend of $2.154 a share.

Now 2024, as you likely know, has seen both the Woodside share price and the S&P/ASX 200 Index (ASX: XJO) oil and gas stock's dividends retrace.

With this background in mind, here's how much passive income you'd already have banked if you bought $5,000 worth of Woodside shares in early 2021.

Male hands holding Australian dollar banknotes, symbolising dividends. — Image source: Getty Images

Tapping into Woodside shares for passive income

On 8 January 2021, you could have bought Woodside shares for $24.81 apiece.

Meaning your $5,000 investment would have netted you 201 shares, with enough pocket money left over for a pint at the pub.

Yesterday, Woodside shares closed trading at $24.70 each, bringing the value of those 201 shares to $4,964.7.

So, from a capital gains perspective, you'd have lost $35.3 on that investment.

Now, let's take a look at that passive income.

If you bought your Woodside shares in January 2021, you'd have been eligible to receive the past eight dividend payouts.

To be precise, you would already have received seven of those. Woodside stock traded ex-dividend on 5 September. The ASX 200 energy company will pay out its interim dividend of $1.02 a share next Thursday, 3 October.

But since you'd already be eligible to receive that, let's factor that income in here.

Running the numbers, the past eight fully franked dividends Woodside has paid since early 2021 add up to a (rounded) total of $8.96 a share.

Meaning the 201 shares you bought in January 2021 will have delivered $1,800.96 in passive income.

Now, let's add that back into the $4,964.7 present value of those shares.

Adding in those dividends, the accumulated value of your Woodside shares purchased for $5,000 in 2021 is $6,765.66.

Or a gain of 35.3%, with potential tax benefits from those franked credits.

Which is a handy reminder of just how much difference passive income can make to your long-term returns.

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