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“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

— Warren Buffett

The Warren Buffett investment philosophy calls for a long-term investment horizon, where a twenty year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Sealed Air Corp (NYSE: SEE)? Today, we examine the outcome of a twenty year investment into the stock back in 1999.

Start date: 06/28/1999


End date: 06/26/2019
Start price/share: $31.53
End price/share: $41.62
Starting shares: 317.16
Ending shares: 407.80
Dividends reinvested/share: $6.97
Total return: 69.73%
Average annual return: 2.68%
Starting investment: $10,000.00
Ending investment: $16,975.07

As shown above, the twenty year investment result worked out as follows, with an annualized rate of return of 2.68%. This would have turned a $10K investment made 20 years ago into $16,975.07 today (as of 06/26/2019). On a total return basis, that’s a result of 69.73% (something to think about: how might SEE shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Sealed Air Corp paid investors a total of $6.97/share in dividends over the 20 holding period, marking a second component of the total return beyond share price change alone. Much like watering a tree, reinvesting dividends can help an investment to grow over time — for the above calculations we assume dividend reinvestment (and for this exercise the closing price on ex-date is used for the reinvestment of a given dividend).

Based upon the most recent annualized dividend rate of .64/share, we calculate that SEE has a current yield of approximately 1.54%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .64 against the original $31.53/share purchase price. This works out to a yield on cost of 4.88%.

Another great investment quote to think about:
“You make most of your money in a bear market, you just don’t realize it at the time.” — Shelby Davis