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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 Colgate-Palmolive Co. (NYSE: CL)? Today, we examine the outcome of a decade-long investment into the stock back in 2013.

Start date: 10/16/2013


End date: 10/13/2023
Start price/share: $62.28
End price/share: $70.95
Starting shares: 160.57
Ending shares: 202.39
Dividends reinvested/share: $16.60
Total return: 43.60%
Average annual return: 3.69%
Starting investment: $10,000.00
Ending investment: $14,365.66

The above analysis shows the decade-long investment result worked out as follows, with an annualized rate of return of 3.69%. This would have turned a $10K investment made 10 years ago into $14,365.66 today (as of 10/13/2023). On a total return basis, that’s a result of 43.60% (something to think about: how might CL shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Colgate-Palmolive Co. paid investors a total of $16.60/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 1.92/share, we calculate that CL has a current yield of approximately 2.71%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.92 against the original $62.28/share purchase price. This works out to a yield on cost of 4.35%.

Here’s one more great investment quote before you go:
“As long as you enjoy investing, you’ll be willing to do the homework and stay in the game.” — Jim Cramer