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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 above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a decade-long period?

Today, let’s look backwards in time to 2011, and take a look at what happened to investors who asked that very question about ONEOK Inc (NYSE: OKE), by taking a look at the investment outcome over a decade-long holding period.

Start date: 06/09/2011


End date: 06/08/2021
Start price/share: $30.44
End price/share: $55.78
Starting shares: 328.52
Ending shares: 565.11
Dividends reinvested/share: $25.02
Total return: 215.22%
Average annual return: 12.16%
Starting investment: $10,000.00
Ending investment: $31,524.85

The above analysis shows the decade-long investment result worked out quite well, with an annualized rate of return of 12.16%. This would have turned a $10K investment made 10 years ago into $31,524.85 today (as of 06/08/2021). On a total return basis, that’s a result of 215.22% (something to think about: how might OKE shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that ONEOK Inc paid investors a total of $25.02/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 3.74/share, we calculate that OKE has a current yield of approximately 6.70%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 3.74 against the original $30.44/share purchase price. This works out to a yield on cost of 22.01%.

More investment wisdom to ponder:
“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.” — George Soros