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“I buy on the assumption that they could close the market the next day and not reopen it for five years.”

— Warren Buffett

The Warren Buffett investment philosophy calls for a long-term investment horizon, where a five year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Pentair PLC (NYSE: PNR)? Today, we examine the outcome of a five year investment into the stock back in 2017.

Start date: 05/24/2017


End date: 05/23/2022
Start price/share: $44.72
End price/share: $49.11
Starting shares: 223.61
Ending shares: 243.38
Dividends reinvested/share: $3.98
Total return: 19.52%
Average annual return: 3.63%
Starting investment: $10,000.00
Ending investment: $11,951.64

The above analysis shows the five year investment result worked out as follows, with an annualized rate of return of 3.63%. This would have turned a $10K investment made 5 years ago into $11,951.64 today (as of 05/23/2022). On a total return basis, that’s a result of 19.52% (something to think about: how might PNR shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Pentair PLC paid investors a total of $3.98/share in dividends over the 5 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 .84/share, we calculate that PNR has a current yield of approximately 1.71%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .84 against the original $44.72/share purchase price. This works out to a yield on cost of 3.82%.

One more piece of investment wisdom to leave you with:
“If I’ve learned one thing in this life it’s this: even if you lose, don’t lose the lesson.” — Daymond John