Here's How A 5-Year 'Buy And Hold' Worked Out For OXY

<div style=”float: left; margin-right: 18px; margin-bottom: 18px; width: 100%”><div style=”float: left; margin-right: 18px; width: 175px;”><img src=”https://mmjstockwatch.com/wp-content/uploads/2019/02/warren-buffett-wikicommons.jpg”><div style=”font-size:6pt; color: #888888″>Photo credit: <a href=”https://commons.wikimedia.org/wiki/Category:Warren_Buffett” style=”text-decoration:none; font-size:6pt; color:#888888″>commons.wikimedia.org</a></div></div> ”I buy on the assumption that they could close the market the next day and not reopen it for five years.” — Warren Buffett</div><div style=”clear:both”><div style=”margin-left: 4px; margin-bottom: 12px; text-align: center; vertical-align: middle; padding: 18px; background-color: #FFFF99; border: 1px dotted #666666; font-family: ‘Trebuchet MS’; font-size: 16pt;”><a target=”_new” style=”color: #0000ED; font-weight: bold;” href=”https://www.dividendchannel.com/top-dividend-paying-stocks/”>Click Here For The Top Dividend Paying Stocks 2015-2020 »</a></div>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 Occidental Petroleum Corp (<a href=”https://www.dividendchannel.com/history/?symbol=oxy”>NYSE: OXY</a>)? Today, we examine the outcome of a five year investment into the stock back in 2015. <table width=”100%” border=”0″ cellspacing=”0″ cellpadding=”3″ bgcolor=”FFFFFF”><tr><td class=”menuoff” colspan=”3″ style=”padding:0px; margin:0px;”>OXY 5-Year Return Details</td></tr> <tr> <td style=”margin:0px; text-align: left; padding: 6px; background-color: #FFFFFF; border-bottom: 1px solid #CCCCCC; font-size: 13px;”>Start date:</td> <td align=”right” style=”margin:0px; text-align: right; padding: 6px; background-color: #FFFFFF; border-bottom: 1px solid #CCCCCC; font-size: 13px;”>04/21/2015</td> <td rowspan=”11″ style=”margin:0px; border-left: 1px solid #DDDDDD;background: -moz-linear-gradient(top, #feffff 0%, #ddf1f9 35%, #a0d8ef 100%);background: -webkit-linear-gradient(top, #feffff 0%,#ddf1f9 35%,#a0d8ef 100%);background: linear-gradient(to bottom, #feffff 0%,#ddf1f9 35%,#a0d8ef 100%);filter: progid:DXImageTransform.Microsoft.gradient( startColorstr=’#feffff’, endColorstr=’#a0d8ef’,GradientType=0 );” valign=”bottom” align=”right” width=”125″> <table border=”0″ cellspacing=”0″ cellpadding=”0″ style=”font-size:11pt”> <tr><td valign=”bottom” align=”center” style=”font-size:10pt; margin:0px; vertical-align: bottom;”>$10,000 <img src=”https://mmjstockwatch.com/wp-content/uploads/2019/02/mmjline.gif” width=”45″ height=”150″ style=”width:45px; height:150px;”> 04/21/2015</td><td> </td><td valign=”bottom” align=”center” style=”font-size:10pt”>$2,127 <img src=”https://mmjstockwatch.com/wp-content/uploads/2019/02/mmjline.gif” width=”45″ height=”32″ style=”width:45px; height:32px;”> 04/20/2020</td></tr></table> </td> </tr> <tr> <td style=”height: 30px; margin:0px; text-align: left; padding: 6px; background-color: #FFFFFF; border-bottom: 1px solid #CCCCCC; font-size: 13px;”>End date:</td> <td align=”right” style=”height: 30px; margin:0px; text-align: right; padding: 6px; background-color: #FFFFFF; border-bottom: 1px solid #CCCCCC; font-size: 13px;”>04/20/2020</td> </tr> <tr> <td style=”height: 30px; margin:0px; text-align: left; padding: 6px; background-color: #FFFFFF; border-bottom: 1px solid #CCCCCC; font-size: 13px;”>Start price/share:</td> <td align=”right” style=”height: 30px; margin:0px; text-align: right; padding: 6px; background-color: #FFFFFF; border-bottom: 1px solid #CCCCCC; font-size: 13px;”>$79.31</td> </tr> <tr> <td style=”height: 30px; margin:0px; text-align: left; padding: 6px; background-color: #FFFFFF; border-bottom: 1px solid #CCCCCC; font-size: 13px;”>End price/share:</td> <td align=”right” style=”height: 30px; margin:0px; text-align: right; padding: 6px; background-color: #FFFFFF; border-bottom: 1px solid #CCCCCC; font-size: 13px;”>$12.59</td> </tr> <tr> <td style=”height: 30px; margin:0px; text-align: left; padding: 6px; background-color: #FFFFFF; border-bottom: 1px solid #CCCCCC; font-size: 13px;”>Starting shares:</td> <td align=”right” style=”height: 30px; margin:0px; text-align: right; padding: 6px; background-color: #FFFFFF; border-bottom: 1px solid #CCCCCC; font-size: 13px;”>126.09</td> </tr> <tr> <td style=”height: 30px; margin:0px; text-align: left; padding: 6px; background-color: #FFFFFF; border-bottom: 1px solid #CCCCCC; font-size: 13px;”>Ending shares:</td> <td align=”right” style=”height: 30px; margin:0px; text-align: right; padding: 6px; background-color: #FFFFFF; border-bottom: 1px solid #CCCCCC; font-size: 13px;”>169.01</td> </tr> <tr> <td style=”height: 30px; margin:0px; text-align: left; padding: 6px; background-color: #FFFFFF; border-bottom: 1px solid #CCCCCC; font-size: 13px;”>Dividends reinvested/share:</td> <td align=”right” style=”height: 30px; margin:0px; text-align: right; padding: 6px; background-color: #FFFFFF; border-bottom: 1px solid #CCCCCC; font-size: 13px;”>$15.36</td> </tr> <tr> <td style=”height: 30px; margin:0px; text-align: left; padding: 6px; background-color: #FFFFFF; border-bottom: 1px solid #CCCCCC; font-size: 13px;”>Total return:</td> <td align=”right” style=”height: 30px; margin:0px; text-align: right; padding: 6px; background-color: #FFFFFF; border-bottom: 1px solid #CCCCCC; font-size: 13px;”>-78.72%</td> </tr> <tr> <td style=”height: 30px; margin:0px; text-align: left; padding: 6px; background-color: #FFFFFF; border-bottom: 1px solid #CCCCCC; font-size: 13px;”>Average annual return:</td> <td align=”right” style=”height: 30px; margin:0px; text-align: right; padding: 6px; background-color: #FFFFFF; border-bottom: 1px solid #CCCCCC; font-size: 13px;”>-26.61%</td> </tr> <tr> <td style=”height: 30px; margin:0px; text-align: left; padding: 6px; background-color: #FFFFFF; border-bottom: 1px solid #CCCCCC; font-size: 13px;”>Starting investment:</td> <td align=”right” style=”height: 30px; margin:0px; text-align: right; padding: 6px; background-color: #FFFFFF; border-bottom: 1px solid #CCCCCC; font-size: 13px;”>$10,000.00</td> </tr> <tr> <td style=”height: 30px; margin:0px; text-align: left; padding: 6px; background-color: #FFFFFF; border-bottom: 1px solid #CCCCCC; font-size: 13px;”>Ending investment:</td> <td align=”right” style=”height: 30px; margin:0px; text-align: right; padding: 6px; background-color: #FFFFFF; border-bottom: 1px solid #CCCCCC; font-size: 13px;”>$2,127.24</td> </tr> </table>As we can see, the five year investment result worked out poorly, with an annualized rate of return of -26.61%. This would have turned a $10K investment made 5 years ago into $2,127.24 today (as of 04/20/2020). On a total return basis, that’s a result of -78.72% (something to think about: how might OXY shares perform over the next 5 years?). [These numbers were computed with the <a href=”https://www.dividendchannel.com/”>Dividend Channel </a><a href=”https://www.dividendchannel.com/drip-returns-calculator/”>DRIP Returns Calculator</a>.]Notice that Occidental Petroleum Corp paid investors a total of $15.36/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 3.16/share, we calculate that <a href=”https://www.dividendchannel.com/symbol/oxy/”>OXY</a> has a current yield of approximately 25.10%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 3.16 against the original $79.31/share purchase price. This works out to a yield on cost of 31.65%.Here’s one more great investment quote before you go: ”The most important three words in investing is: â€œI don’t know.â€ If someone doesn’t say that to you then they are lying.” — James Altucher<div style=”margin-top: 12px; margin-left: 4px; text-align: center; vertical-align: middle; padding: 18px; background-color: #FFFF99; border: 1px dotted #666666; font-family: ‘Trebuchet MS’; font-size: 16pt;”><a target=”_new” style=”color: #0000ED; font-weight: bold;” href=”https://www.dividendchannel.com/slideshows/warren-buffett-dividend-stocks/”>SLIDESHOW: Warren Buffett Dividend Stocks »</a></div>