Photo credit:

“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

— Warren Buffett

The Warren Buffett investment philosophy calls for a long-term investment horizon, where a two-decade holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Kimco Realty Corp (NYSE: KIM)? Today, we examine the outcome of a two-decade investment into the stock back in 2003.

Start date: 08/25/2003


End date: 08/24/2023
Start price/share: $20.40
End price/share: $18.72
Starting shares: 490.20
Ending shares: 1,246.06
Dividends reinvested/share: $20.09
Total return: 133.26%
Average annual return: 4.32%
Starting investment: $10,000.00
Ending investment: $23,310.57

The above analysis shows the two-decade investment result worked out as follows, with an annualized rate of return of 4.32%. This would have turned a $10K investment made 20 years ago into $23,310.57 today (as of 08/24/2023). On a total return basis, that’s a result of 133.26% (something to think about: how might KIM shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Kimco Realty Corp paid investors a total of $20.09/share in dividends over the 20 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 .92/share, we calculate that KIM has a current yield of approximately 4.91%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .92 against the original $20.40/share purchase price. This works out to a yield on cost of 24.07%.

More investment wisdom to ponder:
“Searching for companies is like looking for grubs under rocks: if you turn over 10 rocks you’ll likely find one grub; if you turn over 20 rocks you’ll find two.” — Peter Lynch