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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 Mondelez International Inc (NASD: MDLZ)? Today, we examine the outcome of a ten year investment into the stock back in 2013.

Start date: 12/11/2013


End date: 12/08/2023
Start price/share: $34.08
End price/share: $71.09
Starting shares: 293.43
Ending shares: 358.35
Dividends reinvested/share: $10.15
Total return: 154.75%
Average annual return: 9.80%
Starting investment: $10,000.00
Ending investment: $25,463.15

The above analysis shows the ten year investment result worked out well, with an annualized rate of return of 9.80%. This would have turned a $10K investment made 10 years ago into $25,463.15 today (as of 12/08/2023). On a total return basis, that’s a result of 154.75% (something to think about: how might MDLZ shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Mondelez International Inc paid investors a total of $10.15/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 1.7/share, we calculate that MDLZ has a current yield of approximately 2.39%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.7 against the original $34.08/share purchase price. This works out to a yield on cost of 7.01%.

Here’s one more great investment quote before you go:
“The intelligent investor is a realist who sells to optimists and buys from pessimists.” — Benjamin Graham