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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 Devon Energy Corp. (NYSE: DVN)? Today, we examine the outcome of a decade-long investment into the stock back in 2012.

Start date: 12/10/2012


End date: 12/07/2022
Start price/share: $52.32
End price/share: $64.25
Starting shares: 191.13
Ending shares: 251.82
Dividends reinvested/share: $10.74
Total return: 61.79%
Average annual return: 4.93%
Starting investment: $10,000.00
Ending investment: $16,178.55

As shown above, the decade-long investment result worked out as follows, with an annualized rate of return of 4.93%. This would have turned a $10K investment made 10 years ago into $16,178.55 today (as of 12/07/2022). On a total return basis, that’s a result of 61.79% (something to think about: how might DVN shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Devon Energy Corp. paid investors a total of $10.74/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 5.4/share, we calculate that DVN has a current yield of approximately 8.40%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 5.4 against the original $52.32/share purchase price. This works out to a yield on cost of 16.06%.

One more piece of investment wisdom to leave you with:
“The stock market is a device to transfer money from the impatient to the patient.” — Warren Buffett