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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 McCormick & Co Inc (NYSE: MKC)? Today, we examine the outcome of a five year investment into the stock back in 2019.

Start date: 01/03/2019


End date: 01/02/2024
Start price/share: $68.13
End price/share: $69.54
Starting shares: 146.78
Ending shares: 159.55
Dividends reinvested/share: $6.91
Total return: 10.95%
Average annual return: 2.10%
Starting investment: $10,000.00
Ending investment: $11,095.04

The above analysis shows the five year investment result worked out as follows, with an annualized rate of return of 2.10%. This would have turned a $10K investment made 5 years ago into $11,095.04 today (as of 01/02/2024). On a total return basis, that’s a result of 10.95% (something to think about: how might MKC shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that McCormick & Co Inc paid investors a total of $6.91/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 1.68/share, we calculate that MKC has a current yield of approximately 2.42%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.68 against the original $68.13/share purchase price. This works out to a yield on cost of 3.55%.

Another great investment quote to think about:
“A 10% decline in the market is fairly common, it happens about once a year. Investors who realize this are less likely to sell in a panic, and more likely to remain invested, benefitting from the wealthbuilding power of stocks.” — Christopher Davis