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“Someone’s sitting in the shade today because someone planted a tree a long time ago.”

— Warren Buffett

The Warren Buffett investment philosophy calls for a long-term investment horizon, where a two-decade holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Eversource Energy (NYSE: ES)? Today, we examine the outcome of a two-decade investment into the stock back in 2003.

Start date: 12/15/2003


End date: 12/13/2023
Start price/share: $19.52
End price/share: $63.09
Starting shares: 512.30
Ending shares: 979.27
Dividends reinvested/share: $29.84
Total return: 517.82%
Average annual return: 9.53%
Starting investment: $10,000.00
Ending investment: $61,799.74

As we can see, the two-decade investment result worked out well, with an annualized rate of return of 9.53%. This would have turned a $10K investment made 20 years ago into $61,799.74 today (as of 12/13/2023). On a total return basis, that’s a result of 517.82% (something to think about: how might ES shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Eversource Energy paid investors a total of $29.84/share in dividends over the 20 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 2.7/share, we calculate that ES has a current yield of approximately 4.28%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 2.7 against the original $19.52/share purchase price. This works out to a yield on cost of 21.93%.

One more piece of investment wisdom to leave you with:
“Cash is a fact, profit is an opinion.” — Alfred Rappaport