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 Weyerhaeuser Co (NYSE: WY)? Today, we examine the outcome of a five year investment into the stock back in 2015.

Start date: 02/13/2015


End date: 02/12/2020
Start price/share: $35.52
End price/share: $29.75
Starting shares: 281.53
Ending shares: 347.21
Dividends reinvested/share: $6.37
Total return: 3.30%
Average annual return: 0.65%
Starting investment: $10,000.00
Ending investment: $10,329.25

The above analysis shows the five year investment result worked out as follows, with an annualized rate of return of 0.65%. This would have turned a $10K investment made 5 years ago into $10,329.25 today (as of 02/12/2020). On a total return basis, that’s a result of 3.30% (something to think about: how might WY shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Weyerhaeuser Co paid investors a total of $6.37/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 1.36/share, we calculate that WY has a current yield of approximately 4.57%. 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 $35.52/share purchase price. This works out to a yield on cost of 12.87%.

Another great investment quote to think about:
“In the end, how your investments behave is much less important than how you behave.” — Benjamin Graham