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“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

— Warren Buffett

One of the most important things investors can learn from Warren Buffett, is about how they approach their time horizon for an investment into a stock under consideration. Because immediately after buying shares of a given stock, investors will then be able to check on the day-to-day (and even minute-by-minute) market value. Some days the stock market will be up, other days down. These daily fluctuations can often distract from the long-term view. Today, we look at the result of a twenty year holding period for an investor who was considering Nucor Corp. (NYSE: NUE) back in 2004, bought the stock, ignored the market’s ups and downs, and simply held through to today.

Start date: 03/08/2004


End date: 03/06/2024
Start price/share: $14.96
End price/share: $184.65
Starting shares: 668.45
Ending shares: 1,186.10
Dividends reinvested/share: $30.97
Total return: 2,090.13%
Average annual return: 16.68%
Starting investment: $10,000.00
Ending investment: $219,017.62

As shown above, the twenty year investment result worked out exceptionally well, with an annualized rate of return of 16.68%. This would have turned a $10K investment made 20 years ago into $219,017.62 today (as of 03/06/2024). On a total return basis, that’s a result of 2,090.13% (something to think about: how might NUE shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Nucor Corp. paid investors a total of $30.97/share in dividends over the 20 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 2.16/share, we calculate that NUE has a current yield of approximately 1.17%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 2.16 against the original $14.96/share purchase price. This works out to a yield on cost of 7.82%.

Another great investment quote to think about:
“Don’t wait for the perfect time, you will wait forever. Always take advantage of the time you’re given and make it perfect.” — Daymond John