“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 longterm 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 ColgatePalmolive Co. (NYSE: CL)? Today, we examine the outcome of a ten year investment into the stock back in 2013.
Start date:  03/07/2013 


End date:  03/06/2023  
Start price/share:  $57.71  
End price/share:  $73.29  
Starting shares:  173.28  
Ending shares:  218.19  
Dividends reinvested/share:  $16.32  
Total return:  59.91%  
Average annual return:  4.80%  
Starting investment:  $10,000.00  
Ending investment:  $15,983.38 
The above analysis shows the ten year investment result worked out as follows, with an annualized rate of return of 4.80%. This would have turned a $10K investment made 10 years ago into $15,983.38 today (as of 03/06/2023). On a total return basis, that’s a result of 59.91% (something to think about: how might CL shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that ColgatePalmolive Co. paid investors a total of $16.32/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 exdate is used for the reinvestment of a given dividend).
Based upon the most recent annualized dividend rate of 1.88/share, we calculate that CL has a current yield of approximately 2.57%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.88 against the original $57.71/share purchase price. This works out to a yield on cost of 4.45%.
More investment wisdom to ponder:
“Value investing is at its core the marriage of a contrarian streak and a calculator.” — Seth Klarman