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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 Thermo Fisher Scientific Inc (NYSE: TMO), by taking a look at the investment outcome over a decade-long holding period.

Start date: 07/26/2013


End date: 07/25/2023
Start price/share: $90.59
End price/share: $570.91
Starting shares: 110.39
Ending shares: 114.17
Dividends reinvested/share: $7.96
Total return: 551.79%
Average annual return: 20.61%
Starting investment: $10,000.00
Ending investment: $65,171.26

As we can see, the decade-long investment result worked out exceptionally well, with an annualized rate of return of 20.61%. This would have turned a $10K investment made 10 years ago into $65,171.26 today (as of 07/25/2023). On a total return basis, that’s a result of 551.79% (something to think about: how might TMO shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Thermo Fisher Scientific Inc paid investors a total of $7.96/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 1.4/share, we calculate that TMO has a current yield of approximately 0.25%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.4 against the original $90.59/share purchase price. This works out to a yield on cost of 0.28%.

One more piece of investment wisdom to leave you with:
“Anyone who is not investing now is missing a tremendous opportunity.” — Carlos Slim