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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 Boeing Co. (NYSE: BA)? Today, we examine the outcome of a five year investment into the stock back in 2019.

Start date: 03/05/2019


End date: 03/04/2024
Start price/share: $430.12
End price/share: $200.54
Starting shares: 23.25
Ending shares: 23.80
Dividends reinvested/share: $8.22
Total return: -52.26%
Average annual return: -13.74%
Starting investment: $10,000.00
Ending investment: $4,773.88

As shown above, the five year investment result worked out poorly, with an annualized rate of return of -13.74%. This would have turned a $10K investment made 5 years ago into $4,773.88 today (as of 03/04/2024). On a total return basis, that’s a result of -52.26% (something to think about: how might BA shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Boeing Co. paid investors a total of $8.22/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 8.22/share, we calculate that BA has a current yield of approximately 4.10%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 8.22 against the original $430.12/share purchase price. This works out to a yield on cost of 0.95%.

More investment wisdom to ponder:
“I’d like to live as a poor man with lots of money.” — Pablo Picasso