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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 Pfizer Inc (NYSE: PFE)? Today, we examine the outcome of a ten year investment into the stock back in 2014.

Start date: 02/03/2014


End date: 01/31/2024
Start price/share: $29.03
End price/share: $27.08
Starting shares: 344.47
Ending shares: 506.95
Dividends reinvested/share: $13.72
Total return: 37.28%
Average annual return: 3.22%
Starting investment: $10,000.00
Ending investment: $13,727.80

As shown above, the ten year investment result worked out as follows, with an annualized rate of return of 3.22%. This would have turned a $10K investment made 10 years ago into $13,727.80 today (as of 01/31/2024). On a total return basis, that’s a result of 37.28% (something to think about: how might PFE shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Pfizer Inc paid investors a total of $13.72/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 1.68/share, we calculate that PFE has a current yield of approximately 6.20%. 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 $29.03/share purchase price. This works out to a yield on cost of 21.36%.

Another great investment quote to think about:
“The ideal business is one that earns very high returns on capital and that keeps using lots of capital at those high returns. That becomes a compounding machine.” — Warren Buffett