If you'd bought $10,000 worth of Rio Tinto Ltd (ASX: RIO), Fortescue Ltd (ASX: FMG) and BHP Group Ltd (ASX: BHP) shares five years ago, which investment would have delivered the best returns?
It's a question I was asked this past week.
And one I didn't have a ready answer for.
So, I did a little digging into how the S&P/ASX 200 Index (ASX: XJO) mining giants have performed since mid-May 2021.
Here's what I found, bearing in mind that the S&P/ASX 200 Gross Total Return Index (ASX: XJT) – which includes all cash dividends reinvested on the ex-dividend date – is up 49.2% over the past five years.
(*Note, all price figures are as at late morning trade on Friday, 22 May. Calculations are made assuming a full $10,000 invested in each ASX 200 mining stock.)
Image source: Getty Images
Rio Tinto, Fortescue, or BHP shares?
In no particular order, we'll kick off with Rio Tinto.
Five years ago, on 21 May 2021, you could have picked up Rio Tinto shares for $122.12 apiece. On Friday, those same shares were changing hands for $184.48.
That represents a gain of 51.1%.
But let's not forget those all-important dividends.
If you bought and held onto those Rio Tinto shares for the past five years, you'd have received the last 10 fully-franked dividend payouts.
According to my trusty calculator, that equates to a total dividend payout of $40.09 a share.
If we add that back into Friday's share price, then the accumulated value of the Rio Tinto shares you bought five years ago comes out to $224.57 a share, or a gain of 83.9%.
That would have seen your $10,000 investment grow to $18,389 today, with potential tax benefits from those franking credits.
Turning to BHP, five years ago, the Aussie mining giant was trading for $42.52 a share. On Friday, BHP shares were swapping hands for $59.82 each, for a five-year gain of 40.1%.
As for those fully-franked BHP dividends, since 21 May 2021, you have seen 10 of those passive income payouts land in your bank account, totalling $14.92 a share.
Adding that back into BHP's recent share price, the accumulated value of those BHP shares is now worth $74.74 each. That's a gain of 75.8%. And it would have grown your $10,000 investment into $17,578 today.
Finally, five years ago, Fortescue shares were trading for $22.30. On Friday, shares were trading for $21.63. That's a loss of 3%, without counting the dividends.
Now, if we add in the last 10 fully-franked dividend payouts, totalling $9.62 a share, then the accumulated value of Fortescue shares bought on 21 May 2021 is now worth $31.25 each.
Demonstrating the importance of those dividend payments, that equates to a gain of 40.1%, or enough to turn your $10,000 investment into $14,013 today.
And the winner is…
Rio Tinto shares narrowly edge out BHP shares as the better investment over the past five years, with Fortescue coming in a distant third.
