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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 Chevron Corporation (NYSE: CVX)? Today, we examine the outcome of a decade-long investment into the stock back in 2011.

Start date: 07/22/2011


End date: 07/21/2021
Start price/share: $108.97
End price/share: $99.82
Starting shares: 91.77
Ending shares: 137.16
Dividends reinvested/share: $43.13
Total return: 36.92%
Average annual return: 3.19%
Starting investment: $10,000.00
Ending investment: $13,691.49

As shown above, the decade-long investment result worked out as follows, with an annualized rate of return of 3.19%. This would have turned a $10K investment made 10 years ago into $13,691.49 today (as of 07/21/2021). On a total return basis, that’s a result of 36.92% (something to think about: how might CVX shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Chevron Corporation paid investors a total of $43.13/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 5.36/share, we calculate that CVX has a current yield of approximately 5.37%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 5.36 against the original $108.97/share purchase price. This works out to a yield on cost of 4.93%.

One more investment quote to leave you with:
“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