Photo credit:

“I buy on the assumption that they could close the market the next day and not reopen it for five years.”

— Warren Buffett

The above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a five year period?

Today, let’s look backwards in time to 2018, and take a look at what happened to investors who asked that very question about WEC Energy Group Inc (NYSE: WEC), by taking a look at the investment outcome over a five year holding period.

Start date: 03/09/2018


End date: 03/08/2023
Start price/share: $60.55
End price/share: $89.25
Starting shares: 165.15
Ending shares: 191.49
Dividends reinvested/share: $12.96
Total return: 70.91%
Average annual return: 11.31%
Starting investment: $10,000.00
Ending investment: $17,087.20

As shown above, the five year investment result worked out quite well, with an annualized rate of return of 11.31%. This would have turned a $10K investment made 5 years ago into $17,087.20 today (as of 03/08/2023). On a total return basis, that’s a result of 70.91% (something to think about: how might WEC shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that WEC Energy Group Inc paid investors a total of $12.96/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 3.12/share, we calculate that WEC has a current yield of approximately 3.50%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 3.12 against the original $60.55/share purchase price. This works out to a yield on cost of 5.78%.

Here’s one more great investment quote before you go:
“Be fearful when others are greedy; be greedy when others are fearful.” — Warren Buffett