“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 DISH Network Corp (NASD: DISH)? Today, we examine the outcome of a ten year investment into the stock back in 2011.
| Start date: | 02/10/2011 |
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| End date: | 02/09/2021 | ||||
| Start price/share: | $23.49 | ||||
| End price/share: | $32.28 | ||||
| Starting shares: | 425.71 | ||||
| Ending shares: | 473.48 | ||||
| Dividends reinvested/share: | $3.00 | ||||
| Total return: | 52.84% | ||||
| Average annual return: | 4.33% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $15,282.45 | ||||
As we can see, the ten year investment result worked out as follows, with an annualized rate of return of 4.33%. This would have turned a $10K investment made 10 years ago into $15,282.45 today (as of 02/09/2021). On a total return basis, that’s a result of 52.84% (something to think about: how might DISH shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that DISH Network Corp paid investors a total of $3.00/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 /share, we calculate that DISH has a current yield of approximately 0.00%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of against the original $23.49/share purchase price. This works out to a yield on cost of 0.00%.
Here’s one more great investment quote before you go:
“The whole secret to winning big in the stock market is not to be right all the time, but to lose the least amount possible when you’re wrong.” — William O’Neil
