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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 ten year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Pentair PLC (NYSE: PNR)? Today, we examine the outcome of a ten year investment into the stock back in 2013.

Start date: 11/27/2013


End date: 11/24/2023
Start price/share: $47.86
End price/share: $63.22
Starting shares: 208.94
Ending shares: 250.75
Dividends reinvested/share: $8.25
Total return: 58.52%
Average annual return: 4.72%
Starting investment: $10,000.00
Ending investment: $15,857.75

As shown above, the ten year investment result worked out as follows, with an annualized rate of return of 4.72%. This would have turned a $10K investment made 10 years ago into $15,857.75 today (as of 11/24/2023). On a total return basis, that’s a result of 58.52% (something to think about: how might PNR shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Pentair PLC paid investors a total of $8.25/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 .88/share, we calculate that PNR has a current yield of approximately 1.39%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .88 against the original $47.86/share purchase price. This works out to a yield on cost of 2.90%.

Another great investment quote to think about:
“A market downturn doesn’t bother us. It is an opportunity to increase our ownership of great companies with great management at good prices.” — Warren Buffett