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

Start date: 05/21/2012


End date: 05/18/2022
Start price/share: $61.38
End price/share: $64.28
Starting shares: 162.92
Ending shares: 215.51
Dividends reinvested/share: $26.39
Total return: 38.53%
Average annual return: 3.31%
Starting investment: $10,000.00
Ending investment: $13,847.93

As we can see, the decade-long investment result worked out as follows, with an annualized rate of return of 3.31%. This would have turned a $10K investment made 10 years ago into $13,847.93 today (as of 05/18/2022). On a total return basis, that’s a result of 38.53% (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 2.05%. 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 $61.38/share purchase price. This works out to a yield on cost of 3.34%.

Another great investment quote to think about:
“A lot of people with high IQs are terrible investors because they’ve got terrible temperaments. You need to keep raw, irrational emotion under control.” — Charlie Munger