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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 Franklin Resources Inc (NYSE: BEN)? Today, we examine the outcome of a decade-long investment into the stock back in 2011.

Start date: 09/28/2011


End date: 09/27/2021
Start price/share: $32.54
End price/share: $32.19
Starting shares: 307.31
Ending shares: 430.01
Dividends reinvested/share: $11.48
Total return: 38.42%
Average annual return: 3.30%
Starting investment: $10,000.00
Ending investment: $13,838.23

As we can see, the decade-long investment result worked out as follows, with an annualized rate of return of 3.30%. This would have turned a $10K investment made 10 years ago into $13,838.23 today (as of 09/27/2021). On a total return basis, that’s a result of 38.42% (something to think about: how might BEN shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Franklin Resources Inc paid investors a total of $11.48/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 1.12/share, we calculate that BEN has a current yield of approximately 3.48%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.12 against the original $32.54/share purchase price. This works out to a yield on cost of 10.69%.

Another great investment quote to think about:
“I made my money by selling too soon.” — Bernard Baruch