If I had invested £5,000 in easyJet shares five years ago this is what I would have today

I am very tempted to buy EasyJet (LSE: EZJ) shares, look to be trading at an unbearably cheap 9.54 times trailing earnings. That is less than FTSE 100 average 15.4 times. It's an exciting opportunity, but there are risks too.

Recent investors have had a rough time, as easyJet's stock has fallen 44.19% over five years. If I had invested £5k in August 2019, I would have received about 650 shares at the current price of 769.51p per share. Today, those shares are worth 435p each.

I couldn't get much money to ease my pain. In 2019, EasyJet paid a dividend of 36.9%. I would have received £239, paid in March 2020.

FTSE 100 fighter

Then the pandemic hit, grounding flights all over the world, and easyJet didn't pay another dividend for four years. The board eventually restored payouts to 4.5p per share. It would have cost me £29.25 in March this year. Today my £5k would be worth just £3,096 including dividends, a drop of 38.66%.

Fortunately, I haven't bought the stock in the last five years. So does it give you a good chance to buy the price today?

easyJet's share price is falling again, down 22.42% in the last six months. Over one year, it increased slightly by 1.57%. It certainly hasn't clicked into recovery mode yet.

That was despite posting a 16% rise in core profit before tax to £236m on 24 July. Passenger numbers increased by 8% although the key revenue per seat metric increased by 1%.

The group's easyJet Holidays division performed well, with pre-tax profits up 49% to £73m. With aircraft capacity increasing and disruption costs down by a third, the outlook is promising. So why aren't stocks moving?

Dividend income too

Investors have become wary of the volatility of the aviation sector. Carriers are vulnerable to war, recession, weather, epidemics, industrial action, volcanoes and everything else the world can throw at us.

Airlines have large fixed costs, operating large aircraft that need to be serviced even when they are not flying. Employees cannot simply be fired and rehired whenever it is convenient.

When one airline takes a hit, investors assume others will struggle as well. So when Ryanair warned on 22 July that the drop in fares would affect profits, easyJet shared its pain.

Yet easyJet looks increasingly strong, with a £456m valuation. That rose to £146m at the end of March. The economy is growing, and falling interest rates should put more money in people's pockets. And everyone loves a holiday.

EasyJet is increasing capacity and sales, and driving revenue growth from extras such as baggage, cabin and food. I think today offers an opportunity to buy. The yield is still low at only 1.03% but that should rise in time. I will buy easyJet shsares when I have the money. It is better today than five years ago. I would call it a bad buy.