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“I buy on the assumption that they could close the market the next day and not reopen it for five years.”

— Warren Buffett

The Warren Buffett investment philosophy calls for a long-term investment horizon, where a five year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Clorox Co (NYSE: CLX)? Today, we examine the outcome of a five year investment into the stock back in 2018.

Start date: 09/12/2018


End date: 09/11/2023
Start price/share: $150.84
End price/share: $154.26
Starting shares: 66.30
Ending shares: 75.72
Dividends reinvested/share: $22.12
Total return: 16.80%
Average annual return: 3.15%
Starting investment: $10,000.00
Ending investment: $11,677.40

As shown above, the five year investment result worked out as follows, with an annualized rate of return of 3.15%. This would have turned a $10K investment made 5 years ago into $11,677.40 today (as of 09/11/2023). On a total return basis, that’s a result of 16.80% (something to think about: how might CLX shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Clorox Co paid investors a total of $22.12/share in dividends over the 5 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 4.8/share, we calculate that CLX has a current yield of approximately 3.11%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 4.8 against the original $150.84/share purchase price. This works out to a yield on cost of 2.06%.

More investment wisdom to ponder:
“Invest for the long haul. Don’t get too greedy and don’t get too scared.” — Shelby Davis