Turn £10k Into £30k With AstraZeneca plc

AstraZeneca plc (LON: AZN) would have trebled your money in 10 years.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

AstraZenecaIf you’d held AstraZeneca (LSE: AZN) (NYSE: AZN.US) shares over the past 12 months, you’d have done pretty nicely with a 40% rise to 4,544p.

A lot of that is down to the Pfizer bid, mind, but the turnaround plan put in place by new boss Pascal Soriot was already boosting the shares. And over three years you’d be sitting on a gain of more than 60%.

But Fools are in it for the long term, so what would an investment in AstraZeneca a full 10 years ago be worth now?

Double your money

In September 2004, AstraZeneca shares were changing hands for around 2,265p, so if you’d invested £10,000 at the time you would have picked up 442 shares. Wind forward to today, and with AstraZeneca shares priced at 4,544p you’d have enjoyed a 101% capital gain — you’d have more than doubled your £10,000 in 10 years to £20,062.

Bear in mind that the period covered two traumatic events for AstraZeneca. One was the recession that hit the entire FTSE, but we also had the so-called patent cliff that saw the end of protection of some key drugs. Between late 2006 and early 2008, AstraZeneca shares lost a massive 49%, and investors could be forgiven for not being too impressed by the stock market at the time.

But even if you’d bought in at the very peak of 2006 and suffered the crunch, your shares would still be worth 30% more today! As failures go, I’ve seen worse.

Don’t forget the dividends

If that 10-year doubling impressed you, don’t forget there’s more to come in the shape of dividends. Early in the decade, AstraZeneca was handing out yields of between 2% and 3%, which was a little below the FTSE 100 average. But the dividend was on the rise, and by 2009 it was yielding 5% — and it got as high as 6.1% in 2011.

Altogether, the annual cash handout would have netted you an additional £5,617, giving you a total of £25,679 for an overall return of 157%.

But we don’t want to give you that!

Buy more shares!

No, if you hadn’t needed to spend your dividends, you’d have built an even bigger pot had you reinvested the cash in more AstraZeneca shares every year.

Just those few extra few shares every year would have added another £4,471 to your investment! That’s an extra 45% return on your original £10,000.

Your total gain with all dividends reinvested over 10 years? A pretty cool £30,150! And you’d be starting the next decade with 639 shares instead of your original 442.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Passive income text with pin graph chart on business table
Investing Articles

Yields of up to 7%! I’d consider boosting my income with these FTSE dividend stocks

The London market has some decent-looking dividend stocks right now, and I’m tempted by these two for growing income streams.

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

I’d put £20K in an ISA now to target a £1,900 monthly second income in future!

Christopher Ruane shares why he thinks a long-term approach to investing and careful selection of shares could help him build…

Read more »

Mature couple at the beach
Investing Articles

6 stocks that Fools have been buying!

Our Foolish freelancers are putting their money where their mouths are and buying these stocks in recent weeks.

Read more »

Black woman using loudspeaker to be heard
Investing Articles

I was right about the Barclays share price! Here’s what I think happens next

Jon Smith explains why he still feels the Barclays share price is undervalued and flags up why updates on its…

Read more »

Investing Articles

Where I’d start investing £8,000 in April 2024

Writer Ben McPoland highlights two areas of the stock market that he would target if he were to start investing…

Read more »

View of Tower Bridge in Autumn
Investing Articles

Ahead of the ISA deadline, here are 3 FTSE 100 stocks I’d consider

Jon Smith notes down some FTSE 100 stocks in sectors ranging from property to retail that he thinks could offer…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

Why I think Rolls-Royce shares will pay a dividend in 2024

Stephen Wright thinks Rolls-Royce shares are about to pay a dividend again. But he isn’t convinced this is something investors…

Read more »

Investing Articles

1 of the best UK shares to consider buying in April

Higher gold prices and a falling share price have put this FTSE 250 stock on Stephen Wright's list of UK…

Read more »