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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 Warren Buffett investment philosophy calls for a long-term investment horizon, where a decade-long holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Molson Coors Beverage Co (NYSE: TAP)? Today, we examine the outcome of a decade-long investment into the stock back in 2011.

Start date: 04/29/2011


End date: 04/28/2021
Start price/share: $48.75
End price/share: $51.87
Starting shares: 205.13
Ending shares: 258.24
Dividends reinvested/share: $14.09
Total return: 33.95%
Average annual return: 2.96%
Starting investment: $10,000.00
Ending investment: $13,389.20

As we can see, the decade-long investment result worked out as follows, with an annualized rate of return of 2.96%. This would have turned a $10K investment made 10 years ago into $13,389.20 today (as of 04/28/2021). On a total return basis, that’s a result of 33.95% (something to think about: how might TAP shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Molson Coors Beverage Co paid investors a total of $14.09/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 2.28/share, we calculate that TAP has a current yield of approximately 4.40%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 2.28 against the original $48.75/share purchase price. This works out to a yield on cost of 9.03%.

More investment wisdom to ponder:
“Our job is to find a few intelligent things to do, not to keep up with every damn thing in the world.” — Charlie Munger