Woolworths Group Ltd (ASX: WOW) shares are a popular option for Australian investors.
In fact, the company notes that it has over 350,000 shareholders in total, with the vast majority of these being regular retail investors.
But would it make sense to join your fellow investors and become one of the supermarket giant's shareholders yourself? Let's see what a $5,000 investment in its shares could be worth in a year.
$5,000 invested in Woolworths shares
At present, the Woolworths share price is trading at $33.44.
This means that if you were to invest $5,000 (and a further $16.00) into the supermarket operator's shares, you would end up owning 150 units.
What could they be worth in a year? Well, the good news is that all the major brokers have price targets comfortably ahead of where Woolworths shares currently trade.
For example, Citi has a buy rating and $39.00 price target, whereas Morgan Stanley has an overweight rating and $38.00 price target.
But the most bullish broker out there is Goldman Sachs. It recently reaffirmed its buy rating on the company's shares with a $40.10 price target. Based on its current share price, this implies potential upside of just under 20% for investors between now and this time next year.
This means that if Goldman is on the money with its recommendation, those 150 Woolworths shares would have a market value of $6,015 in a year. This is a return of approximately $1,000 on your original investment.
Don't forget the dividends!
It is also worth remembering that Woolworths is one of the most reliable dividend payers on the Australian share market. In fact, the retail giant was one of only a handful of ASX shares that continued paying dividends as normal during the COVID-19 pandemic.
Goldman expects Woolworths to pay a $1.08 per share fully franked dividend in FY 2025. This will be up 3.8% year on year excluding special dividends.
If this estimate proves accurate, your 150 units will pull in $162 in dividend income over the period. This brings the total value of your investment to $6,177.
Commenting on why it thinks Woolworths shares are a buy, the broker said:
We are Buy rated on the stock as we believe the business has among the highest consumer stickiness and loyalty among peers, and hence has strong ability to drive market share gains via its omni-channel advantage, as well as its ability to pass through any cost inflation to protect its margins, beyond market expectations. The stock is trading below its historical average (since 2018), and we see this as a value entry level for a high-quality and defensive stock.
It is also worth noting that Goldman believes that "earnings and valuation risks from the [supermarket] Inquiries are sufficiently priced in."
