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“I buy on the assumption that they could close the market the next day and not reopen it for five years.”

— Warren Buffett

The Warren Buffett investment philosophy calls for a long-term investment horizon, where a five year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Halliburton Company (NYSE: HAL)? Today, we examine the outcome of a five year investment into the stock back in 2017.

Start date: 03/01/2017


End date: 02/28/2022
Start price/share: $54.70
End price/share: $33.53
Starting shares: 182.82
Ending shares: 200.25
Dividends reinvested/share: $2.47
Total return: -32.85%
Average annual return: -7.66%
Starting investment: $10,000.00
Ending investment: $6,713.51

The above analysis shows the five year investment result worked out poorly, with an annualized rate of return of -7.66%. This would have turned a $10K investment made 5 years ago into $6,713.51 today (as of 02/28/2022). On a total return basis, that’s a result of -32.85% (something to think about: how might HAL shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Halliburton Company paid investors a total of $2.47/share in dividends over the 5 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 .48/share, we calculate that HAL has a current yield of approximately 1.43%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .48 against the original $54.70/share purchase price. This works out to a yield on cost of 2.61%.

One more investment quote to leave you with:
“If I’ve learned one thing in this life it’s this: even if you lose, don’t lose the lesson.” — Daymond John