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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 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 decade-long period?

Today, let’s look backwards in time to 2013, and take a look at what happened to investors who asked that very question about HCA Healthcare Inc (NYSE: HCA), by taking a look at the investment outcome over a decade-long holding period.

Start date: 07/19/2013


End date: 07/18/2023
Start price/share: $38.63
End price/share: $289.74
Starting shares: 258.87
Ending shares: 273.02
Dividends reinvested/share: $9.13
Total return: 691.03%
Average annual return: 22.97%
Starting investment: $10,000.00
Ending investment: $79,111.16

As we can see, the decade-long investment result worked out exceptionally well, with an annualized rate of return of 22.97%. This would have turned a $10K investment made 10 years ago into $79,111.16 today (as of 07/18/2023). On a total return basis, that’s a result of 691.03% (something to think about: how might HCA shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that HCA Healthcare Inc paid investors a total of $9.13/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 2.4/share, we calculate that HCA has a current yield of approximately 0.83%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 2.4 against the original $38.63/share purchase price. This works out to a yield on cost of 2.15%.

More investment wisdom to ponder:
“In investing, what is comfortable is rarely profitable.” — Robert Arnott