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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 ten year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into MGM Resorts International (NYSE: MGM)? Today, we examine the outcome of a ten year investment into the stock back in 2013.

Start date: 07/11/2013


End date: 07/10/2023
Start price/share: $15.26
End price/share: $45.50
Starting shares: 655.31
Ending shares: 694.65
Dividends reinvested/share: $1.62
Total return: 216.06%
Average annual return: 12.19%
Starting investment: $10,000.00
Ending investment: $31,599.36

The above analysis shows the ten year investment result worked out quite well, with an annualized rate of return of 12.19%. This would have turned a $10K investment made 10 years ago into $31,599.36 today (as of 07/10/2023). On a total return basis, that’s a result of 216.06% (something to think about: how might MGM shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that MGM Resorts International paid investors a total of $1.62/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 .01/share, we calculate that MGM has a current yield of approximately 0.02%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .01 against the original $15.26/share purchase price. This works out to a yield on cost of 0.13%.

Another great investment quote to think about:
“The four most dangerous words in investing are: ‘this time it’s different.'” — Sir John Templeton