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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 KeyCorp (NYSE: KEY)? Today, we examine the outcome of a five year investment into the stock back in 2018.

Start date: 01/29/2018


End date: 01/26/2023
Start price/share: $21.80
End price/share: $18.73
Starting shares: 458.72
Ending shares: 558.24
Dividends reinvested/share: $3.55
Total return: 4.56%
Average annual return: 0.90%
Starting investment: $10,000.00
Ending investment: $10,457.66

As we can see, the five year investment result worked out as follows, with an annualized rate of return of 0.90%. This would have turned a $10K investment made 5 years ago into $10,457.66 today (as of 01/26/2023). On a total return basis, that’s a result of 4.56% (something to think about: how might KEY shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that KeyCorp paid investors a total of $3.55/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 .82/share, we calculate that KEY has a current yield of approximately 4.38%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .82 against the original $21.80/share purchase price. This works out to a yield on cost of 20.09%.

Another great investment quote to think about:
“The best stock to buy is the one you already own.” — Peter Lynch