$10K Invested In Expedia Group In 2014 Is Worth This Much Today

— Warren Buffett

This inspiring quote from Warren Buffett teaches us the importance of considering our investment time horizon when approaching any given investment: Could we envision ourselves holding the stock we are considering for many years? Even a five year holding period potentially?

For “buy-and-hold” investors taking a long-term view, what’s important isn’t the short-term stock market fluctuations that will inevitably occur, but what happens over the long haul. Looking back 5 years to 2014, investors considering an investment into shares of Expedia Group Inc (NASD: EXPE) may have been pondering this very question and thinking about their potential investment result over a full five year time horizon. Here’s how that would have worked out.

EXPE 5-Year Return Details
Start date:	10/22/2014	$10,000 10/22/2014 $18,052 10/21/2019
End date:	10/21/2019
Start price/share:	$79.01
End price/share:	$136.26
Starting shares:	126.57
Ending shares:	132.48
Dividends reinvested/share:	$5.40
Total return:	80.52%
Average annual return:	12.54%
Starting investment:	$10,000.00
Ending investment:	$18,052.38

As we can see, the five year investment result worked out quite well, with an annualized rate of return of 12.54%. This would have turned a $10K investment made 5 years ago into $18,052.38 today (as of 10/21/2019). On a total return basis, that’s a result of 80.52% (something to think about: how might EXPE shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Dividends are always an important investment factor to consider, and Expedia Group Inc has paid $5.40/share in dividends to shareholders over the past 5 years we looked at above. Many an investor will only invest in stocks that pay dividends, so this component of total return is always an important consideration. Automated reinvestment of dividends into additional shares of stock can be a great way for an investor to compound their returns. The above calculations are done with the assuption that dividends received over time are reinvested (the calcuations use the closing price on ex-date).

Based upon the most recent annualized dividend rate of 1.36/share, we calculate that EXPE has a current yield of approximately 1.00%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.36 against the original $79.01/share purchase price. This works out to a yield on cost of 1.27%.

Here’s one more great investment quote before you go:
“Investors should always keep in mind that the most important metric is not the returns achieved but the returns weighed against the risks incurred. Ultimately, nothing should be more important to investors than the ability to sleep soundly at night.” — Seth Klarman