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“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 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 Expedia Group Inc (NASD: EXPE)? Today, we examine the outcome of a five year investment into the stock back in 2016.

Start date: 03/07/2016


End date: 03/04/2021
Start price/share: $105.39
End price/share: $158.41
Starting shares: 94.89
Ending shares: 99.09
Dividends reinvested/share: $5.06
Total return: 56.96%
Average annual return: 9.45%
Starting investment: $10,000.00
Ending investment: $15,698.71

As shown above, the five year investment result worked out well, with an annualized rate of return of 9.45%. This would have turned a $10K investment made 5 years ago into $15,698.71 today (as of 03/04/2021). On a total return basis, that’s a result of 56.96% (something to think about: how might EXPE shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Expedia Group Inc paid investors a total of $5.06/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 1.36/share, we calculate that EXPE 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 1.36 against the original $105.39/share purchase price. This works out to a yield on cost of 0.00%.

One more investment quote to leave you with:
“Know what you own and why you own it.” — Peter Lynch