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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 decade-long period?

Today, let’s look backwards in time to 2014, and take a look at what happened to investors who asked that very question about United Rentals Inc (NYSE: URI), by taking a look at the investment outcome over a decade-long holding period.

Start date: 01/17/2014


End date: 01/16/2024
Start price/share: $81.09
End price/share: $561.13
Starting shares: 123.32
Ending shares: 125.06
Dividends reinvested/share: $5.92
Total return: 601.74%
Average annual return: 21.51%
Starting investment: $10,000.00
Ending investment: $70,202.41

As we can see, the decade-long investment result worked out exceptionally well, with an annualized rate of return of 21.51%. This would have turned a $10K investment made 10 years ago into $70,202.41 today (as of 01/16/2024). On a total return basis, that’s a result of 601.74% (something to think about: how might URI shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that United Rentals Inc paid investors a total of $5.92/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 5.92/share, we calculate that URI has a current yield of approximately 1.05%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 5.92 against the original $81.09/share purchase price. This works out to a yield on cost of 1.29%.

One more investment quote to leave you with:
“We don’t have to be smarter than the rest. We have to be more disciplined than the rest.” — Warren Buffett