Turn £10k Into £30k With AstraZeneca plc

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.


Would it surprise you to hear that £1,000 invested in shares in 1899 would now be worth a cool £149,000? But that's if you kept and spent your dividends. We've already seen what reinvesting the cash did for AstraZeneca investors -- and that same £1,000 in shares in 1899 with all dividends reinvested would have reached a staggering £22 million by today!

If you like the sound of that, a copy of the Motley Fool's brand new report, How You Could Retire Seriously Rich, is just what you need!

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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.