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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 Anthem Inc (NYSE: ANTM)? Today, we examine the outcome of a decade-long investment into the stock back in 2009.

Start date: 07/09/2009


End date: 07/08/2019
Start price/share: $50.18
End price/share: $284.74
Starting shares: 199.28
Ending shares: 227.63
Dividends reinvested/share: $17.37
Total return: 548.15%
Average annual return: 20.54%
Starting investment: $10,000.00
Ending investment: $64,793.90

As shown above, the decade-long investment result worked out exceptionally well, with an annualized rate of return of 20.54%. This would have turned a $10K investment made 10 years ago into $64,793.90 today (as of 07/08/2019). On a total return basis, that’s a result of 548.15% (something to think about: how might ANTM shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Anthem Inc paid investors a total of $17.37/share in dividends over the 10 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 3.2/share, we calculate that ANTM has a current yield of approximately 1.12%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 3.2 against the original $50.18/share purchase price. This works out to a yield on cost of 2.23%.

One more investment quote to leave you with:
“As long as you enjoy investing, you’ll be willing to do the homework and stay in the game.” — Jim Cramer