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“Someone’s sitting in the shade today because someone planted a tree a long time ago.”

— Warren Buffett

The Warren Buffett investment philosophy calls for a long-term investment horizon, where a twenty year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Newell Brands Inc (NASD: NWL)? Today, we examine the outcome of a twenty year investment into the stock back in 2001.

Start date: 03/26/2001


End date: 03/25/2021
Start price/share: $27.07
End price/share: $25.87
Starting shares: 369.41
Ending shares: 680.26
Dividends reinvested/share: $14.34
Total return: 75.98%
Average annual return: 2.87%
Starting investment: $10,000.00
Ending investment: $17,614.72

As we can see, the twenty year investment result worked out as follows, with an annualized rate of return of 2.87%. This would have turned a $10K investment made 20 years ago into $17,614.72 today (as of 03/25/2021). On a total return basis, that’s a result of 75.98% (something to think about: how might NWL shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Newell Brands Inc paid investors a total of $14.34/share in dividends over the 20 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 .92/share, we calculate that NWL has a current yield of approximately 3.56%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .92 against the original $27.07/share purchase price. This works out to a yield on cost of 13.15%.

One more piece of investment wisdom to leave you with:
“Money is better than poverty, if only for financial reasons.” — Woody Allen