Photo credit:

“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 ONEOK Inc (NYSE: OKE)? Today, we examine the outcome of a ten year investment into the stock back in 2012.

Start date: 04/23/2012


End date: 04/20/2022
Start price/share: $35.97
End price/share: $73.62
Starting shares: 278.01
Ending shares: 490.84
Dividends reinvested/share: $27.07
Total return: 261.36%
Average annual return: 13.71%
Starting investment: $10,000.00
Ending investment: $36,127.15

The above analysis shows the ten year investment result worked out quite well, with an annualized rate of return of 13.71%. This would have turned a $10K investment made 10 years ago into $36,127.15 today (as of 04/20/2022). On a total return basis, that’s a result of 261.36% (something to think about: how might OKE shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that ONEOK Inc paid investors a total of $27.07/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 3.74/share, we calculate that OKE has a current yield of approximately 5.08%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 3.74 against the original $35.97/share purchase price. This works out to a yield on cost of 14.12%.

More investment wisdom to ponder:
“We don’t have to be smarter than the rest. We have to be more disciplined than the rest.” — Warren Buffett