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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 ten year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Johnson Controls International plc (NYSE: JCI)? Today, we examine the outcome of a ten year investment into the stock back in 2010.

Start date: 05/19/2010


End date: 05/18/2020
Start price/share: $39.45
End price/share: $29.53
Starting shares: 253.49
Ending shares: 351.43
Dividends reinvested/share: $13.54
Total return: 3.78%
Average annual return: 0.37%
Starting investment: $10,000.00
Ending investment: $10,376.43

As we can see, the ten year investment result worked out as follows, with an annualized rate of return of 0.37%. This would have turned a $10K investment made 10 years ago into $10,376.43 today (as of 05/18/2020). On a total return basis, that’s a result of 3.78% (something to think about: how might JCI shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Johnson Controls International plc paid investors a total of $13.54/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 1.04/share, we calculate that JCI has a current yield of approximately 3.52%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.04 against the original $39.45/share purchase price. This works out to a yield on cost of 8.92%.

More investment wisdom to ponder:
“When I was young I thought that money was the most important thing in life; now that I am old I know that it is.” — Oscar Wilde