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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 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 Boston Properties Inc (NYSE: BXP)? Today, we examine the outcome of a decade-long investment into the stock back in 2012.

Start date: 04/11/2012


End date: 04/08/2022
Start price/share: $100.45
End price/share: $122.70
Starting shares: 99.55
Ending shares: 139.70
Dividends reinvested/share: $39.45
Total return: 71.41%
Average annual return: 5.54%
Starting investment: $10,000.00
Ending investment: $17,143.79

As shown above, the decade-long investment result worked out well, with an annualized rate of return of 5.54%. This would have turned a $10K investment made 10 years ago into $17,143.79 today (as of 04/08/2022). On a total return basis, that’s a result of 71.41% (something to think about: how might BXP shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Boston Properties Inc paid investors a total of $39.45/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 3.92/share, we calculate that BXP has a current yield of approximately 3.19%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 3.92 against the original $100.45/share purchase price. This works out to a yield on cost of 3.18%.

Here’s one more great investment quote before you go:
“The ideal business is one that earns very high returns on capital and that keeps using lots of capital at those high returns. That becomes a compounding machine.” — Warren Buffett