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“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

— Warren Buffett

The Warren Buffett investment philosophy calls for a long-term investment horizon, where a twenty year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Marriott International, Inc. (NASD: MAR)? Today, we examine the outcome of a twenty year investment into the stock back in 2003.

Start date: 07/03/2003


End date: 06/30/2023
Start price/share: $17.98
End price/share: $183.69
Starting shares: 556.17
Ending shares: 672.82
Dividends reinvested/share: $12.97
Total return: 1,135.90%
Average annual return: 13.39%
Starting investment: $10,000.00
Ending investment: $123,536.17

As shown above, the twenty year investment result worked out quite well, with an annualized rate of return of 13.39%. This would have turned a $10K investment made 20 years ago into $123,536.17 today (as of 06/30/2023). On a total return basis, that’s a result of 1,135.90% (something to think about: how might MAR shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Marriott International, Inc. paid investors a total of $12.97/share in dividends over the 20 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 2.08/share, we calculate that MAR has a current yield of approximately 1.13%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 2.08 against the original $17.98/share purchase price. This works out to a yield on cost of 6.28%.

More investment wisdom to ponder:
“The most important thing about an investment philosophy is that you have one.” — David Booth