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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 DuPont (NYSE: DD)? Today, we examine the outcome of a ten year investment into the stock back in 2012.

Start date: 04/19/2012


End date: 04/18/2022
Start price/share: $70.26
End price/share: $68.60
Starting shares: 142.33
Ending shares: 188.27
Dividends reinvested/share: $26.39
Total return: 29.15%
Average annual return: 2.59%
Starting investment: $10,000.00
Ending investment: $12,914.59

As we can see, the ten year investment result worked out as follows, with an annualized rate of return of 2.59%. This would have turned a $10K investment made 10 years ago into $12,914.59 today (as of 04/18/2022). On a total return basis, that’s a result of 29.15% (something to think about: how might DD shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that DuPont paid investors a total of $26.39/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 1.32/share, we calculate that DD has a current yield of approximately 1.92%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.32 against the original $70.26/share purchase price. This works out to a yield on cost of 2.73%.

Another great investment quote to think about:
“The stock market is a device to transfer money from the impatient to the patient.” — Warren Buffett