If you were brave enough to invest $10,000 in Pilbara Minerals Ltd (ASX: PLS) shares during the market turmoil of mid-2020, you'd have every reason to smile today.
Back in June 2020, Pilbara Minerals shares were down in the dumps (along with most ASX shares) as investors feared the worst during the height of the COVID-19 pandemic.
But it certainly paid to pick up shares in the lithium miner during this period. Let's see what a $10,000 investment would be worth now.
$10,000 invested in Pilbara Minerals shares
Five years ago, Pilbara Minerals shares were changing hands for just 29 cents. This means that with a $10,000 investment, you could have picked up 34,483 units.
Impressively, despite trading nowhere near its highs, investors would have still achieved a huge return on their investment buying at that level.
At the time of writing, five years later, the company's shares are trading at $1.34.
That means that those 34,483 shares currently have a market value of $46,207.22. That's a stunning 362% return — and that's just from share price appreciation.
Don't forget the dividends
While much of the focus has been on the Pilbara Minerals share price, it is also worth highlighting that the company unveiled a dividend policy during its golden run.
After generating enormous profits during the lithium price boom, the miner returned capital to shareholders for the first time.
This saw the company pay a total of 25 cents per share (fully franked) across 2023.
For someone holding 34,483 shares, that would have meant receiving $8,620.75 in cash dividends in that year alone. Not bad for a company that once sat in penny stock territory.
Of course, those dividend payments have since paused as lithium prices pulled back and the company took a more conservative stance. But it served as a powerful example of the earning potential when times are good.
The peak that could've been
And speaking of good times, let's not forget how extraordinary the rally in lithium stocks became at its height.
In late 2022, Pilbara Minerals shares reached an all-time high of $5.66. At that level, your 34,483 shares would've been worth a jaw-dropping $195,173.78 — a nearly 1,900% return on your initial $10,000 stake.
If you had been lucky enough to sell at the top, you would have been laughing all the way to the bank. But even those who didn't sell at the top and have held on through the downturn are still sitting on impressive long-term gains.
Where next?
The team at Macquarie sees potential for some big returns over the next 12 months.
This week, its analysts put an outperform rating and $2.40 price target on its shares. This implies potential upside of almost 80% from current levels.
