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If you’d invested $1,000 in CSL’s IPO, this is how much you’d have now

Sebastian Bowen
Wealthy man with money raining down

CSL Ltd (ASX: CSL) has long been a market darling of the ASX. It’s one of those rare blue-chips that doesn’t seem to have to worry about stagnating growth or market saturation – let alone a Royal Commission!

CSL shares have made more all-time highs this year than most ASX growth stocks and are currently trading for $281 – which looks very nice considering this company started off 2019 at $185.38.

But just how much would any (unbelievably lucky) investor have made if they had invested in CSL back when the company first hit the ASX decks?

For anyone not aware, CSL used to be a government department – CSL actually stands for Commonwealth Serum Laboratories and has a long and illustrious pre-privatisation track record long before investors could share in the glory.

But in 1994, then-Prime Minister Paul Keating decided CSL was ready to fly the public nest and CSL shares hit the markets for an Initial Public Offering (IPO) of $2.30 per share. If that doesn’t sound ludicrous enough, CSL has undergone several share buy-backs since, so in reality, the real cost-base would be less than half of that price by my calculations.

That means a $1,000 investment in CSL back in ’94 would have resulted in a purchase of roughly 435 shares – which today would be worth approximately $121,200. If you factor in the share buy-backs, you’d be standing in the $280,000 ballpark. And we haven’t even mentioned the dividends CSL has paid since its listing, which would add a tidy sum on top.

Foolish Takeaway

Whilst it’s no good crying over spilt milk (don’t worry, I’m almost crying as I write this), I think CSL is a good example of how a long-term investing mindset can work in your favour.

CSL has delivered these gains despite the dot-com bubble in the early 2000s and the Global Financial Crisis of 2008/09 – anyone who sold out then would still be licking their wounds, I’d wager. My takeaway from the CSL story: If you’ve found a winner, stay the course and you’ll be rewarded!

The post If you’d invested $1,000 in CSL’s IPO, this is how much you’d have now appeared first on Motley Fool Australia.

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Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019