If I’d invested £5k in Rightmove shares 10 years ago, here’s how much I’d have now

Move right (LSE: RMV) shares are often overlooked by retail investors. This is a bit of a surprise to me, as it has been a very good investment for the long term.

Here, I want to see how much I would have today if I had invested £5,000 in it FTSE 100 Save a decade ago. Let’s crunch the numbers.

A great investment

10 years ago the shares were trading at 179p (after accounting for the 10/1 share split that took place in 2018). But today, they changed hands for 563p. That represents a gain of around 215%.

This means that if I had invested £5k in the company, my investment would now be worth approximately £15.7k. It’s a good result. It shows a gain of just over 12% per year – a higher return than the FTSE 100 index has generated.

At one stage, my investment will be worth more. Back at the start of 2022, Rightmove shares were trading near 800p. So my £5k investment is about £22.5k.

It should be noted that Rightmove has paid a small dividend almost every year for the last decade. So, I will also have passive income for many years, as well as profit.

Quality business

Looking at the numbers, there’s quite a bit to do, in my mind.

One is that it can pay to focus on ‘quality’ when investing in stocks.

Rightmove is a high quality business. For starters, it has a strong brand and a high market share. This is the first place people go to when looking for a home in the UK.

Rightmove continues to be the place to go and return first,
with an average of over 1.35bn minutes on our platform every month by 2022.

Rightmove CEO Peter Brooks-Johnson

Secondly, it is very profitable (it is one of the most profitable companies in the FTSE 100). Over the past three years, the return on working capital (ROCE) has averaged 233%.

Third, it has a strong balance sheet with minimal debt. Overall, it has a lot of quality policies.

Another takeaway is that price isn’t everything. Rightmove has never been a cheap stock. It always has a higher value. However, this does not stop it from producing excellent results for investors.

Finally, the calculation shows the strength of the investment for the long term. Over the last decade, the UK stock market has seen many ups and downs. Brexit, Covid, and the energy crisis in 2015 all dragged stocks down significantly. But Rightmove shares still managed to return more than 12% a year over that period.

Share Rightmove today

Is the stock worth buying today? In my opinion, yes. I think the stock price can continue to rise from here.

They are not without risk. For example, a proper property market crash in the UK (like 2008-09) can send stocks down.

However, in my opinion, the British will not lose interest in real estate anytime soon. So, the company’s platform should remain popular.

And with a new CEO coming in this month (who has plenty of experience growing businesses) there is reason to be optimistic about the outlook.