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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 Tyson Foods Inc (NYSE: TSN)? Today, we examine the outcome of a five year investment into the stock back in 2019.

Start date: 03/07/2019


End date: 03/06/2024
Start price/share: $64.11
End price/share: $53.40
Starting shares: 155.98
Ending shares: 178.13
Dividends reinvested/share: $8.95
Total return: -4.88%
Average annual return: -0.99%
Starting investment: $10,000.00
Ending investment: $9,514.45

As we can see, the five year investment result worked out poorly, with an annualized rate of return of -0.99%. This would have turned a $10K investment made 5 years ago into $9,514.45 today (as of 03/06/2024). On a total return basis, that’s a result of -4.88% (something to think about: how might TSN shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Tyson Foods Inc paid investors a total of $8.95/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 1.96/share, we calculate that TSN has a current yield of approximately 3.67%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.96 against the original $64.11/share purchase price. This works out to a yield on cost of 5.72%.

More investment wisdom to ponder:
“Although it’s easy to forget sometimes, a share is not a lottery ticket… it’s part-ownership of a business.” — Peter Lynch