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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 The Cigna Group (NYSE: CI), by taking a look at the investment outcome over a decade-long holding period.

Start date: 09/03/2013


End date: 08/31/2023
Start price/share: $79.46
End price/share: $276.26
Starting shares: 125.85
Ending shares: 131.68
Dividends reinvested/share: $11.22
Total return: 263.77%
Average annual return: 13.79%
Starting investment: $10,000.00
Ending investment: $36,382.06

As we can see, the decade-long investment result worked out quite well, with an annualized rate of return of 13.79%. This would have turned a $10K investment made 10 years ago into $36,382.06 today (as of 08/31/2023). On a total return basis, that’s a result of 263.77% (something to think about: how might CI shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that The Cigna Group paid investors a total of $11.22/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 4.92/share, we calculate that CI has a current yield of approximately 1.78%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 4.92 against the original $79.46/share purchase price. This works out to a yield on cost of 2.24%.

Here’s one more great investment quote before you go:
“If you’re looking for a home run, a great investment for five years or 10 years or more, then the only way to beat this enormous fog that covers the future is to identify a long-term trend that will give a particular business some sort of edge.” — Ralph Wanger