“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 decade-long holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Las Vegas Sands Corp (NYSE: LVS)? Today, we examine the outcome of a decade-long investment into the stock back in 2012.
| Start date: | 02/09/2012 |
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| End date: | 02/08/2022 | ||||
| Start price/share: | $52.55 | ||||
| End price/share: | $45.75 | ||||
| Starting shares: | 190.29 | ||||
| Ending shares: | 284.91 | ||||
| Dividends reinvested/share: | $22.42 | ||||
| Total return: | 30.35% | ||||
| Average annual return: | 2.68% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $13,029.31 | ||||
As we can see, the decade-long investment result worked out as follows, with an annualized rate of return of 2.68%. This would have turned a $10K investment made 10 years ago into $13,029.31 today (as of 02/08/2022). On a total return basis, that’s a result of 30.35% (something to think about: how might LVS shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Las Vegas Sands Corp paid investors a total of $22.42/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 3.08/share, we calculate that LVS has a current yield of approximately 6.73%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 3.08 against the original $52.55/share purchase price. This works out to a yield on cost of 12.81%.
One more piece of investment wisdom to leave you with:
“A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price.” — Benjamin Graham
