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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 Extra Space Storage Inc (NYSE: EXR)? Today, we examine the outcome of a decade-long investment into the stock back in 2012.

Start date: 10/31/2012


End date: 10/28/2022
Start price/share: $34.49
End price/share: $178.71
Starting shares: 289.94
Ending shares: 406.90
Dividends reinvested/share: $31.32
Total return: 627.18%
Average annual return: 21.95%
Starting investment: $10,000.00
Ending investment: $72,707.96

The above analysis shows the decade-long investment result worked out exceptionally well, with an annualized rate of return of 21.95%. This would have turned a $10K investment made 10 years ago into $72,707.96 today (as of 10/28/2022). On a total return basis, that’s a result of 627.18% (something to think about: how might EXR shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Extra Space Storage Inc paid investors a total of $31.32/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 6/share, we calculate that EXR has a current yield of approximately 3.36%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 6 against the original $34.49/share purchase price. This works out to a yield on cost of 9.74%.

More investment wisdom to ponder:
“I believe in the discipline of mastering the best that other people have ever figured out. I don’t believe in just sitting down and trying to dream it all up yourself. Nobody’s that smart.” — Charlie Munger