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“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

— Warren Buffett

The Warren Buffett investment philosophy calls for a long-term investment horizon, where a two-decade holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Molson Coors Beverage Co (NYSE: TAP)? Today, we examine the outcome of a two-decade investment into the stock back in 2001.

Start date: 11/02/2001


End date: 11/01/2021
Start price/share: $25.78
End price/share: $45.18
Starting shares: 387.90
Ending shares: 577.68
Dividends reinvested/share: $20.52
Total return: 161.00%
Average annual return: 4.91%
Starting investment: $10,000.00
Ending investment: $26,092.09

The above analysis shows the two-decade investment result worked out as follows, with an annualized rate of return of 4.91%. This would have turned a $10K investment made 20 years ago into $26,092.09 today (as of 11/01/2021). On a total return basis, that’s a result of 161.00% (something to think about: how might TAP shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Molson Coors Beverage Co paid investors a total of $20.52/share in dividends over the 20 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 1.36/share, we calculate that TAP has a current yield of approximately 3.01%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.36 against the original $25.78/share purchase price. This works out to a yield on cost of 11.68%.

More investment wisdom to ponder:
“Sentimentality about an investments leads to lack of discipline.” — Sam Zell