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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 DuPont (NYSE: DD)? Today, we examine the outcome of a decade-long investment into the stock back in 2013.

Start date: 02/25/2013


End date: 02/23/2023
Start price/share: $61.59
End price/share: $72.84
Starting shares: 162.36
Ending shares: 211.35
Dividends reinvested/share: $25.45
Total return: 53.95%
Average annual return: 4.41%
Starting investment: $10,000.00
Ending investment: $15,396.46

The above analysis shows the decade-long investment result worked out as follows, with an annualized rate of return of 4.41%. This would have turned a $10K investment made 10 years ago into $15,396.46 today (as of 02/23/2023). On a total return basis, that’s a result of 53.95% (something to think about: how might DD shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that DuPont paid investors a total of $25.45/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 1.44/share, we calculate that DD has a current yield of approximately 1.98%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.44 against the original $61.59/share purchase price. This works out to a yield on cost of 3.21%.

More investment wisdom to ponder:
“While some might mistakenly consider value investing a mechanical tool for identifying bargains, it is actually a comprehensive investment philosophy that emphasizes the need to perform in-depth fundamental analysis, pursue long-term investment results, limit risk, and resist crowd psychology.” — Seth Klarman