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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 ten year 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 Rollins, Inc. (NYSE: ROL), by taking a look at the investment outcome over a ten year holding period.

Start date: 12/12/2013


End date: 12/11/2023
Start price/share: $8.63
End price/share: $41.63
Starting shares: 1,158.75
Ending shares: 1,328.00
Dividends reinvested/share: $3.11
Total return: 452.85%
Average annual return: 18.64%
Starting investment: $10,000.00
Ending investment: $55,273.22

The above analysis shows the ten year investment result worked out exceptionally well, with an annualized rate of return of 18.64%. This would have turned a $10K investment made 10 years ago into $55,273.22 today (as of 12/11/2023). On a total return basis, that’s a result of 452.85% (something to think about: how might ROL shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Rollins, Inc. paid investors a total of $3.11/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 .6/share, we calculate that ROL has a current yield of approximately 1.44%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .6 against the original $8.63/share purchase price. This works out to a yield on cost of 16.69%.

One more piece of investment wisdom to leave you with:
“You make most of your money in a bear market, you just don’t realize it at the time.” — Shelby Davis