If you bought Westpac Banking Corp (ASX: WBC) shares a year ago, you would have been laughing all the way to the bank.
Over the past 12 months, the banking giant's shares have absolutely decimated the market with some very strong returns.
But what would a $10,000 investment in Australia's oldest bank back then be worth today? Let's find out.
$10,000 invested in Westpac shares
A year ago, investors could have picked up the big four bank's shares for $21.22 each.
This means that if you were to sink $10,000 (and an extra $15.84 for good measure) of your hard-earned money into the bank's stock, you would have been left owning 472 Westpac shares.
Thanks to a significant rally in the banking sector since then, those shares would be worth considerably more today.
For example, the Westpac share price ended yesterday's session at a lofty $33.24. This is just shy of a multi-year high for the bank.
This means that those 472 Westpac shares now have a market value of $15,689.28. That's a massive $5,673.44 return on your original investment.
That's quite staggering for a banking stock, which are generally regarded as stalwarts that are expected to rise largely in line with the market.
Whereas this approximate annual return of 57% is better than the returns of some of the most explosive ASX growth shares out there.
And we are not even finished with the returns!
Don't forget the dividends
Over the past 12 months, Westpac has continued to reward its loyal shareholders with dividend payments.
In December 2023, Westpac paid a fully franked final dividend of 72 cents per share.
It then followed this up with an interim dividend and $500 million special dividend in June 2024. This brought the total to 90 cents per share for the half and 162 cents per share for the rolling 12-month period.
Based on the buy price of $21.22 per share a year ago, this represents a generous fully franked dividend yield of 7.6%, which is significantly higher than the traditional market average yield of approximately 4%.
This means that your 472 Westpac shares you bought 12 months ago would have pulled in dividend income of $764.64.
If we were to add that to the capital gains, we would have a total return of $6,438.08 over the 12 months from an investment of approximately $10,000. No wonder Westpac's shareholders are smiling right now!
