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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 Walgreens Boots Alliance Inc (NASD: WBA)? Today, we examine the outcome of a decade-long investment into the stock back in 2013.

Start date: 07/19/2013


End date: 07/18/2023
Start price/share: $50.61
End price/share: $29.58
Starting shares: 197.59
Ending shares: 265.55
Dividends reinvested/share: $16.45
Total return: -21.45%
Average annual return: -2.38%
Starting investment: $10,000.00
Ending investment: $7,858.86

As shown above, the decade-long investment result worked out poorly, with an annualized rate of return of -2.38%. This would have turned a $10K investment made 10 years ago into $7,858.86 today (as of 07/18/2023). On a total return basis, that’s a result of -21.45% (something to think about: how might WBA shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Walgreens Boots Alliance Inc paid investors a total of $16.45/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 1.92/share, we calculate that WBA has a current yield of approximately 6.49%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.92 against the original $50.61/share purchase price. This works out to a yield on cost of 12.82%.

Another great investment quote to think about:
“Cash is a fact, profit is an opinion.” — Alfred Rappaport