“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 Las Vegas Sands Corp (NYSE: LVS)? Today, we examine the outcome of a ten year investment into the stock back in 2014.
| Start date: | 01/22/2014 |
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| End date: | 01/19/2024 | ||||
| Start price/share: | $80.47 | ||||
| End price/share: | $48.85 | ||||
| Starting shares: | 124.27 | ||||
| Ending shares: | 168.92 | ||||
| Dividends reinvested/share: | $17.67 | ||||
| Total return: | -17.48% | ||||
| Average annual return: | -1.90% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $8,254.92 | ||||
The above analysis shows the ten year investment result worked out poorly, with an annualized rate of return of -1.90%. This would have turned a $10K investment made 10 years ago into $8,254.92 today (as of 01/19/2024). On a total return basis, that’s a result of -17.48% (something to think about: how might LVS shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Las Vegas Sands Corp paid investors a total of $17.67/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 .8/share, we calculate that LVS has a current yield of approximately 1.64%. 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 $80.47/share purchase price. This works out to a yield on cost of 2.04%.
One more investment quote to leave you with:
“If you are not willing to own a stock for 10 years, do not even think about owning it for 10 minutes.” — Warren Buffett
