“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 ten year 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 ten year investment into the stock back in 2013.
| Start date: | 01/31/2013 |
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| End date: | 01/30/2023 | ||||
| Start price/share: | $55.25 | ||||
| End price/share: | $57.88 | ||||
| Starting shares: | 181.00 | ||||
| Ending shares: | 249.77 | ||||
| Dividends reinvested/share: | $18.67 | ||||
| Total return: | 44.57% | ||||
| Average annual return: | 3.75% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $14,451.90 | ||||
As we can see, the ten year investment result worked out as follows, with an annualized rate of return of 3.75%. This would have turned a $10K investment made 10 years ago into $14,451.90 today (as of 01/30/2023). On a total return basis, that’s a result of 44.57% (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 $18.67/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 5.46%. 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 $55.25/share purchase price. This works out to a yield on cost of 9.88%.
One more piece of investment wisdom to leave you with:
“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.” — George Soros
