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“I buy on the assumption that they could close the market the next day and not reopen it for five years.”

— Warren Buffett

The Warren Buffett investment philosophy calls for a long-term investment horizon, where a five year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Sealed Air Corp (NYSE: SEE)? Today, we examine the outcome of a five year investment into the stock back in 2018.

Start date: 12/11/2018


End date: 12/08/2023
Start price/share: $33.85
End price/share: $33.81
Starting shares: 295.42
Ending shares: 320.60
Dividends reinvested/share: $3.64
Total return: 8.39%
Average annual return: 1.63%
Starting investment: $10,000.00
Ending investment: $10,841.05

The above analysis shows the five year investment result worked out as follows, with an annualized rate of return of 1.63%. This would have turned a $10K investment made 5 years ago into $10,841.05 today (as of 12/08/2023). On a total return basis, that’s a result of 8.39% (something to think about: how might SEE shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Sealed Air Corp paid investors a total of $3.64/share in dividends over the 5 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 .8/share, we calculate that SEE has a current yield of approximately 2.37%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .8 against the original $33.85/share purchase price. This works out to a yield on cost of 7.00%.

More investment wisdom to ponder:
“Smart investing doesn’t consist of buying good assets but of buying assets well. This is a very, very important distinction that very, very few people understand.” — Howard Marks