“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 longterm 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 Newmont Corp (NYSE: NEM)? Today, we examine the outcome of a five year investment into the stock back in 2019.
Start date:  02/01/2019 


End date:  01/31/2024  
Start price/share:  $33.84  
End price/share:  $34.51  
Starting shares:  295.51  
Ending shares:  351.66  
Dividends reinvested/share:  $8.48  
Total return:  21.36%  
Average annual return:  3.95%  
Starting investment:  $10,000.00  
Ending investment:  $12,137.31 
The above analysis shows the five year investment result worked out as follows, with an annualized rate of return of 3.95%. This would have turned a $10K investment made 5 years ago into $12,137.31 today (as of 01/31/2024). On a total return basis, that’s a result of 21.36% (something to think about: how might NEM shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Newmont Corp paid investors a total of $8.48/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 exdate is used for the reinvestment of a given dividend).
Based upon the most recent annualized dividend rate of 1.6/share, we calculate that NEM has a current yield of approximately 4.64%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.6 against the original $33.84/share purchase price. This works out to a yield on cost of 13.71%.
Here’s one more great investment quote before you go:
“Thousands of experts study overbought indicators, headandshoulder patterns, putcall ratios, the Fed’s policy on money supplyâ€¦and they can’t predict markets with any useful consistency, any more than the gizzard squeezers could tell the Roman emperors when the Huns would attack.” — Peter Lynch