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“I buy on the assumption that they could close the market the next day and not reopen it for five years.”

— Warren Buffett

The Warren Buffett investment philosophy calls for a long-term investment horizon, where a five year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into DENTSPLY SIRONA Inc (NASD: XRAY)? Today, we examine the outcome of a five year investment into the stock back in 2016.

Start date: 11/04/2016


End date: 11/03/2021
Start price/share: $60.60
End price/share: $59.22
Starting shares: 165.02
Ending shares: 171.18
Dividends reinvested/share: $1.88
Total return: 1.37%
Average annual return: 0.27%
Starting investment: $10,000.00
Ending investment: $10,135.73

As we can see, the five year investment result worked out as follows, with an annualized rate of return of 0.27%. This would have turned a $10K investment made 5 years ago into $10,135.73 today (as of 11/03/2021). On a total return basis, that’s a result of 1.37% (something to think about: how might XRAY shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that DENTSPLY SIRONA Inc paid investors a total of $1.88/share in dividends over the 5 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 .44/share, we calculate that XRAY has a current yield of approximately 0.74%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .44 against the original $60.60/share purchase price. This works out to a yield on cost of 1.22%.

Another great investment quote to think about:
“Behind every stock is a company. Find out what it’s doing.” — Peter Lynch