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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 Occidental Petroleum Corp (NYSE: OXY)? Today, we examine the outcome of a decade-long investment into the stock back in 2013.

Start date: 07/22/2013


End date: 07/20/2023
Start price/share: $88.11
End price/share: $60.46
Starting shares: 113.49
Ending shares: 163.60
Dividends reinvested/share: $21.04
Total return: -1.09%
Average annual return: -0.11%
Starting investment: $10,000.00
Ending investment: $9,890.54

The above analysis shows the decade-long investment result worked out poorly, with an annualized rate of return of -0.11%. This would have turned a $10K investment made 10 years ago into $9,890.54 today (as of 07/20/2023). On a total return basis, that’s a result of -1.09% (something to think about: how might OXY shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Occidental Petroleum Corp paid investors a total of $21.04/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 .72/share, we calculate that OXY has a current yield of approximately 1.19%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .72 against the original $88.11/share purchase price. This works out to a yield on cost of 1.35%.

One more investment quote to leave you with:
“History provides a crucial insight regarding market crises: they are inevitable, painful and ultimately surmountable.” — Shelby Davis