“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 Cooper Companies, Inc. (NYSE: COO)? Today, we examine the outcome of a ten year investment into the stock back in 2012.
| Start date: | 06/15/2012 |
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| End date: | 06/14/2022 | ||||
| Start price/share: | $78.95 | ||||
| End price/share: | $314.92 | ||||
| Starting shares: | 126.66 | ||||
| Ending shares: | 127.08 | ||||
| Dividends reinvested/share: | $0.60 | ||||
| Total return: | 300.19% | ||||
| Average annual return: | 14.87% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $40,015.77 | ||||
The above analysis shows the ten year investment result worked out quite well, with an annualized rate of return of 14.87%. This would have turned a $10K investment made 10 years ago into $40,015.77 today (as of 06/14/2022). On a total return basis, that’s a result of 300.19% (something to think about: how might COO shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Cooper Companies, Inc. paid investors a total of $0.60/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 .06/share, we calculate that COO has a current yield of approximately 0.02%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .06 against the original $78.95/share purchase price. This works out to a yield on cost of 0.03%.
Here’s one more great investment quote before you go:
“Behind every stock is a company. Find out what it’s doing.” — Peter Lynch
