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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 PVH Corp (NYSE: PVH)? Today, we examine the outcome of a five year investment into the stock back in 2016.

Start date: 03/31/2016


End date: 03/30/2021
Start price/share: $99.06
End price/share: $100.12
Starting shares: 100.95
Ending shares: 101.59
Dividends reinvested/share: $0.61
Total return: 1.71%
Average annual return: 0.34%
Starting investment: $10,000.00
Ending investment: $10,171.16

As we can see, the five year investment result worked out as follows, with an annualized rate of return of 0.34%. This would have turned a $10K investment made 5 years ago into $10,171.16 today (as of 03/30/2021). On a total return basis, that’s a result of 1.71% (something to think about: how might PVH shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that PVH Corp paid investors a total of $0.61/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 .15/share, we calculate that PVH 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 .15 against the original $99.06/share purchase price. This works out to a yield on cost of 0.00%.

More investment wisdom to ponder:
“Spend each day trying to be a little wiser than you were when you woke up.” — Charlie Munger