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“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

— Warren Buffett

The Warren Buffett investment philosophy calls for a long-term investment horizon, where a twenty year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Kimco Realty Corp (NYSE: KIM)? Today, we examine the outcome of a twenty year investment into the stock back in 2002.

Start date: 04/22/2002


End date: 04/19/2022
Start price/share: $16.12
End price/share: $25.80
Starting shares: 620.35
Ending shares: 1,618.99
Dividends reinvested/share: $20.31
Total return: 317.70%
Average annual return: 7.41%
Starting investment: $10,000.00
Ending investment: $41,789.24

As we can see, the twenty year investment result worked out well, with an annualized rate of return of 7.41%. This would have turned a $10K investment made 20 years ago into $41,789.24 today (as of 04/19/2022). On a total return basis, that’s a result of 317.70% (something to think about: how might KIM shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Kimco Realty Corp paid investors a total of $20.31/share in dividends over the 20 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 .76/share, we calculate that KIM has a current yield of approximately 2.95%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .76 against the original $16.12/share purchase price. This works out to a yield on cost of 18.30%.

More investment wisdom to ponder:
“People who invest make money for themselves; people who speculate make money for their brokers.” — Benjamin Graham