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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 Kimco Realty Corp (NYSE: KIM)? Today, we examine the outcome of a five year investment into the stock back in 2017.

Start date: 12/07/2017


End date: 12/06/2022
Start price/share: $18.16
End price/share: $22.09
Starting shares: 550.66
Ending shares: 711.63
Dividends reinvested/share: $4.35
Total return: 57.20%
Average annual return: 9.47%
Starting investment: $10,000.00
Ending investment: $15,720.83

As we can see, the five year investment result worked out well, with an annualized rate of return of 9.47%. This would have turned a $10K investment made 5 years ago into $15,720.83 today (as of 12/06/2022). On a total return basis, that’s a result of 57.20% (something to think about: how might KIM shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Kimco Realty Corp paid investors a total of $4.35/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 .92/share, we calculate that KIM has a current yield of approximately 4.16%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .92 against the original $18.16/share purchase price. This works out to a yield on cost of 22.91%.

More investment wisdom to ponder:
“Value investing requires a great deal of hard work, unusually strict discipline, and a long-term investment horizon. Few are willing and able to devote sufficient time and effort to become value investors, and only a fraction of those have the proper mind-set to succeed.” — Seth Klarman