“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 DISH Network Corp (NASD: DISH)? Today, we examine the outcome of a ten year investment into the stock back in 2011.
| Start date: | 12/16/2011 |
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| End date: | 12/15/2021 | ||||
| Start price/share: | $25.78 | ||||
| End price/share: | $32.20 | ||||
| Starting shares: | 387.90 | ||||
| Ending shares: | 398.48 | ||||
| Dividends reinvested/share: | $1.00 | ||||
| Total return: | 28.31% | ||||
| Average annual return: | 2.52% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $12,827.59 | ||||
As shown above, the ten year investment result worked out as follows, with an annualized rate of return of 2.52%. This would have turned a $10K investment made 10 years ago into $12,827.59 today (as of 12/15/2021). On a total return basis, that’s a result of 28.31% (something to think about: how might DISH shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that DISH Network Corp paid investors a total of $1.00/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/share, we calculate that DISH has a current yield of approximately 3.11%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1 against the original $25.78/share purchase price. This works out to a yield on cost of 12.06%.
One more investment quote to leave you with:
“The whole secret to winning big in the stock market is not to be right all the time, but to lose the least amount possible when you’re wrong.” — William O’Neil
