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“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

— Warren Buffett

The Warren Buffett investment philosophy calls for a long-term investment horizon, where a decade-long holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Air Products & Chemicals Inc (NYSE: APD)? Today, we examine the outcome of a decade-long investment into the stock back in 2009.

Start date: 07/23/2009


End date: 07/22/2019
Start price/share: $66.96
End price/share: $226.01
Starting shares: 149.34
Ending shares: 192.08
Dividends reinvested/share: $28.81
Total return: 334.13%
Average annual return: 15.81%
Starting investment: $10,000.00
Ending investment: $43,414.55

The above analysis shows the decade-long investment result worked out exceptionally well, with an annualized rate of return of 15.81%. This would have turned a $10K investment made 10 years ago into $43,414.55 today (as of 07/22/2019). On a total return basis, that’s a result of 334.13% (something to think about: how might APD shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Many investors out there refuse to own any stock that lacks a dividend; in the case of Air Products & Chemicals Inc, investors have received $28.81/share in dividends these past 10 years examined in the exercise above. This means total return was driven not just by share price, but also by the dividends received (and what the investor did with those dividends). For this exercise, what we’ve done with the dividends is to assume they are reinvestted — i.e. used to purchase additional shares (the calculations use closing price on ex-date).

Based upon the most recent annualized dividend rate of 4.64/share, we calculate that APD has a current yield of approximately 2.05%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 4.64 against the original $66.96/share purchase price. This works out to a yield on cost of 3.06%.

More investment wisdom to ponder:
“The four most dangerous words in investing are: ‘this time it’s different.'” — Sir John Templeton