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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 Dominos Pizza Inc. (NYSE: DPZ)? Today, we examine the outcome of a decade-long investment into the stock back in 2012.

Start date: 12/21/2012


End date: 12/20/2022
Start price/share: $42.90
End price/share: $353.73
Starting shares: 233.10
Ending shares: 258.90
Dividends reinvested/share: $22.48
Total return: 815.79%
Average annual return: 24.78%
Starting investment: $10,000.00
Ending investment: $91,561.57

As shown above, the decade-long investment result worked out exceptionally well, with an annualized rate of return of 24.78%. This would have turned a $10K investment made 10 years ago into $91,561.57 today (as of 12/20/2022). On a total return basis, that’s a result of 815.79% (something to think about: how might DPZ shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Dominos Pizza Inc. paid investors a total of $22.48/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 4.4/share, we calculate that DPZ has a current yield of approximately 1.24%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 4.4 against the original $42.90/share purchase price. This works out to a yield on cost of 2.89%.

Here’s one more great investment quote before you go:
“All the opportunity in the world means nothing if you don’t actually pull the trigger.” — Sam Zell