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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 Occidental Petroleum Corp (NYSE: OXY)? Today, we examine the outcome of a ten year investment into the stock back in 2011.

Start date: 12/08/2011


End date: 12/07/2021
Start price/share: $88.78
End price/share: $31.12
Starting shares: 112.64
Ending shares: 166.55
Dividends reinvested/share: $23.45
Total return: -48.17%
Average annual return: -6.36%
Starting investment: $10,000.00
Ending investment: $5,181.53

As we can see, the ten year investment result worked out poorly, with an annualized rate of return of -6.36%. This would have turned a $10K investment made 10 years ago into $5,181.53 today (as of 12/07/2021). On a total return basis, that’s a result of -48.17% (something to think about: how might OXY shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Occidental Petroleum Corp paid investors a total of $23.45/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 .04/share, we calculate that OXY has a current yield of approximately 0.13%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .04 against the original $88.78/share purchase price. This works out to a yield on cost of 0.15%.

One more piece of investment wisdom to leave you with:
“As in roulette, same is true of the stock trader, who will find that the expense of trading weights the dice heavily against him.” — Benjamin Graham