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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 Nielsen Holdings PLC (NYSE: NLSN)? Today, we examine the outcome of a ten year investment into the stock back in 2011.

Start date: 11/02/2011


End date: 11/01/2021
Start price/share: $28.70
End price/share: $21.16
Starting shares: 348.43
Ending shares: 444.15
Dividends reinvested/share: $8.22
Total return: -6.02%
Average annual return: -0.62%
Starting investment: $10,000.00
Ending investment: $9,396.69

The above analysis shows the ten year investment result worked out poorly, with an annualized rate of return of -0.62%. This would have turned a $10K investment made 10 years ago into $9,396.69 today (as of 11/01/2021). On a total return basis, that’s a result of -6.02% (something to think about: how might NLSN shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Nielsen Holdings PLC paid investors a total of $8.22/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 .24/share, we calculate that NLSN has a current yield of approximately 1.13%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .24 against the original $28.70/share purchase price. This works out to a yield on cost of 3.94%.

Another great investment quote to think about:
“When I was young I thought that money was the most important thing in life; now that I am old I know that it is.” — Oscar Wilde