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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 Expeditors International of Washington, Inc. (NASD: EXPD)? Today, we examine the outcome of a ten year investment into the stock back in 2012.

Start date: 01/06/2012


End date: 01/05/2022
Start price/share: $41.66
End price/share: $129.67
Starting shares: 240.04
Ending shares: 275.07
Dividends reinvested/share: $8.26
Total return: 256.68%
Average annual return: 13.55%
Starting investment: $10,000.00
Ending investment: $35,659.38

As we can see, the ten year investment result worked out quite well, with an annualized rate of return of 13.55%. This would have turned a $10K investment made 10 years ago into $35,659.38 today (as of 01/05/2022). On a total return basis, that’s a result of 256.68% (something to think about: how might EXPD shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Expeditors International of Washington, Inc. paid investors a total of $8.26/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 1.16/share, we calculate that EXPD has a current yield of approximately 0.89%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.16 against the original $41.66/share purchase price. This works out to a yield on cost of 2.14%.

Another great investment quote to think about:
“Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.” — Peter Lynch