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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 ten year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into HanesBrands Inc (NYSE: HBI)? Today, we examine the outcome of a ten year investment into the stock back in 2011.

Start date: 10/20/2011
$10,000

10/20/2011
$31,807

10/19/2021
End date: 10/19/2021
Start price/share: $6.56
End price/share: $16.68
Starting shares: 1,524.39
Ending shares: 1,906.34
Dividends reinvested/share: $4.14
Total return: 217.98%
Average annual return: 12.26%
Starting investment: $10,000.00
Ending investment: $31,807.21

The above analysis shows the ten year investment result worked out quite well, with an annualized rate of return of 12.26%. This would have turned a $10K investment made 10 years ago into $31,807.21 today (as of 10/19/2021). On a total return basis, that’s a result of 217.98% (something to think about: how might HBI shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that HanesBrands Inc paid investors a total of $4.14/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 .6/share, we calculate that HBI has a current yield of approximately 3.60%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .6 against the original $6.56/share purchase price. This works out to a yield on cost of 54.88%.

One more piece of investment wisdom to leave you with:
“October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” — Mark Twain