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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 Comerica, Inc. (NYSE: CMA)? Today, we examine the outcome of a decade-long investment into the stock back in 2013.

Start date: 11/08/2013


End date: 11/07/2023
Start price/share: $45.20
End price/share: $42.45
Starting shares: 221.24
Ending shares: 304.04
Dividends reinvested/share: $18.58
Total return: 29.07%
Average annual return: 2.58%
Starting investment: $10,000.00
Ending investment: $12,902.01

The above analysis shows the decade-long investment result worked out as follows, with an annualized rate of return of 2.58%. This would have turned a $10K investment made 10 years ago into $12,902.01 today (as of 11/07/2023). On a total return basis, that’s a result of 29.07% (something to think about: how might CMA shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Comerica, Inc. paid investors a total of $18.58/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 2.84/share, we calculate that CMA has a current yield of approximately 6.69%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 2.84 against the original $45.20/share purchase price. This works out to a yield on cost of 14.80%.

Here’s one more great investment quote before you go:
“You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets.” — Peter Lynch