“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 longterm 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 Nucor Corp. (NYSE: NUE)? Today, we examine the outcome of a five year investment into the stock back in 2015.
Start date:  08/18/2015 


End date:  08/17/2020  
Start price/share:  $46.46  
End price/share:  $46.37  
Starting shares:  215.24  
Ending shares:  250.34  
Dividends reinvested/share:  $7.71  
Total return:  16.08%  
Average annual return:  3.03%  
Starting investment:  $10,000.00  
Ending investment:  $11,610.58 
The above analysis shows the five year investment result worked out as follows, with an annualized rate of return of 3.03%. This would have turned a $10K investment made 5 years ago into $11,610.58 today (as of 08/17/2020). On a total return basis, that’s a result of 16.08% (something to think about: how might NUE shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Nucor Corp. paid investors a total of $7.71/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 exdate is used for the reinvestment of a given dividend).
Based upon the most recent annualized dividend rate of 1.61/share, we calculate that NUE has a current yield of approximately 3.47%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.61 against the original $46.46/share purchase price. This works out to a yield on cost of 7.47%.
Another great investment quote to think about:
“Though tempting, trying to time the market is a loser’s game.” — Christopher Davis