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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 above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a decade-long period?

Today, let’s look backwards in time to 2011, and take a look at what happened to investors who asked that very question about Iron Mountain Inc (NYSE: IRM), by taking a look at the investment outcome over a decade-long holding period.

Start date: 02/04/2011


End date: 02/03/2021
Start price/share: $23.72
End price/share: $32.41
Starting shares: 421.59
Ending shares: 843.66
Dividends reinvested/share: $22.40
Total return: 173.43%
Average annual return: 10.58%
Starting investment: $10,000.00
Ending investment: $27,353.01

As we can see, the decade-long investment result worked out quite well, with an annualized rate of return of 10.58%. This would have turned a $10K investment made 10 years ago into $27,353.01 today (as of 02/03/2021). On a total return basis, that’s a result of 173.43% (something to think about: how might IRM shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Iron Mountain Inc paid investors a total of $22.40/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 2.474/share, we calculate that IRM has a current yield of approximately 7.63%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 2.474 against the original $23.72/share purchase price. This works out to a yield on cost of 32.17%.

One more investment quote to leave you with:
“Be fearful when others are greedy; be greedy when others are fearful.” — Warren Buffett