$10,000 invested in BHP shares 5 years ago is now worth…

MotleyFool
03-23

Brave investors who took the plunge and invested $10,000 in BHP Group Ltd (ASX: BHP) shares five years ago will be sitting on some outsized gains today.

That's despite the 10% fall in the share price of the S&P/ASX 200 Index (ASX: XJO) iron ore miner over the past 12 months. That fall has been spurred by a slump in global iron ore prices. After hitting US$120 per tonne last May, the industrial metal ended the week at just over US$100 per tonne.

Now, I say 'brave investors' here because a quick glance at the charts will confirm that five years ago, almost every stock on the ASX 200, including BHP shares, had been crashing for weeks.

That stock market rout came as investors around the world went into full panic mode amid the unknowns of the fast-spreading COVID-19 virus.

In hindsight, however, 20 March 2020 would have been an opportune time to tune into the wisdom of billionaire investor Warren Buffett.

Among his many pieces of investment advice, Buffett famously said, "Be greedy when others are fearful."

So, if you were greedy amid the ongoing pandemic fear five years ago and bought $10,000 of BHP shares, just how much would you have today?

Let's find out!

How have BHP shares fared over the last five years?

Five years ago, you could have bought BHP shares for $24.05 apiece.

Exclusive of any potential brokerage fees, that means your $10,000 investment would have netted you 415 shares in the ASX 200 miner, with enough change left over for a small pizza.

On Friday, BHP shares closed the day trading for $39.54. That represents a gain of 64.4%.

And it would have turned your $10,000 investment five years ago into $16,409.1 today.

But let's not forget those dividends.

If you bought those shares on 20 March 2020, you'd have received 10 fully franked dividend payouts from the miner. (BHP pays its FY 2025 interim dividend this Thursday, 27 March. The stock traded ex-dividend on 6 March.)

Demonstrating the big impact that passive income can have on your returns, those 10 dividend payments work out to a total of $15.02 a share. With potential tax benefits from those franking credits.

Adding that to Friday's closing price of $39.54 and the accumulated value of BHP shares bought five years ago comes out to $54.56 today.

That means the 415 shares (and small pizza) that you bought for $10,000 five years ago would be worth $22,642.4 now.

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