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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 Freeport-McMoran Copper & Gold (NYSE: FCX)? Today, we examine the outcome of a decade-long investment into the stock back in 2013.

Start date: 04/04/2013


End date: 04/03/2023
Start price/share: $31.70
End price/share: $41.20
Starting shares: 315.46
Ending shares: 384.82
Dividends reinvested/share: $5.45
Total return: 58.54%
Average annual return: 4.72%
Starting investment: $10,000.00
Ending investment: $15,861.75

As we can see, the decade-long investment result worked out as follows, with an annualized rate of return of 4.72%. This would have turned a $10K investment made 10 years ago into $15,861.75 today (as of 04/03/2023). On a total return basis, that’s a result of 58.54% (something to think about: how might FCX shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Freeport-McMoran Copper & Gold paid investors a total of $5.45/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 .3/share, we calculate that FCX has a current yield of approximately 0.73%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .3 against the original $31.70/share purchase price. This works out to a yield on cost of 2.30%.

Here’s one more great investment quote before you go:
“I think you have to learn that there’s a company behind every stock, and that there’s only one real reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies.” — Peter Lynch