“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 Las Vegas Sands Corp (NYSE: LVS)? Today, we examine the outcome of a decade-long investment into the stock back in 2012.
| Start date: | 11/30/2012 |
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| End date: | 11/29/2022 | ||||
| Start price/share: | $46.65 | ||||
| End price/share: | $44.66 | ||||
| Starting shares: | 214.36 | ||||
| Ending shares: | 316.05 | ||||
| Dividends reinvested/share: | $21.67 | ||||
| Total return: | 41.15% | ||||
| Average annual return: | 3.51% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $14,120.96 | ||||
The above analysis shows the decade-long investment result worked out as follows, with an annualized rate of return of 3.51%. This would have turned a $10K investment made 10 years ago into $14,120.96 today (as of 11/29/2022). On a total return basis, that’s a result of 41.15% (something to think about: how might LVS shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Las Vegas Sands Corp paid investors a total of $21.67/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 3.16/share, we calculate that LVS has a current yield of approximately 7.08%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 3.16 against the original $46.65/share purchase price. This works out to a yield on cost of 15.18%.
Here’s one more great investment quote before you go:
“You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets.” — Peter Lynch
