Photo credit:

“I buy on the assumption that they could close the market the next day and not reopen it for five years.”

— Warren Buffett

The Warren Buffett investment philosophy calls for a long-term investment horizon, where a five year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Kimco Realty Corp (NYSE: KIM)? Today, we examine the outcome of a five year investment into the stock back in 2014.

Start date: 11/07/2014


End date: 11/06/2019
Start price/share: $24.79
End price/share: $21.39
Starting shares: 403.39
Ending shares: 521.97
Dividends reinvested/share: $5.30
Total return: 11.65%
Average annual return: 2.23%
Starting investment: $10,000.00
Ending investment: $11,165.85

As shown above, the five year investment result worked out as follows, with an annualized rate of return of 2.23%. This would have turned a $10K investment made 5 years ago into $11,165.85 today (as of 11/06/2019). On a total return basis, that’s a result of 11.65% (something to think about: how might KIM shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Kimco Realty Corp paid investors a total of $5.30/share in dividends over the 5 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 1.12/share, we calculate that KIM has a current yield of approximately 5.24%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.12 against the original $24.79/share purchase price. This works out to a yield on cost of 21.14%.

More investment wisdom to ponder:
“We don’t have to be smarter than the rest. We have to be more disciplined than the rest.” — Warren Buffett