“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 Walt Disney Co. (NYSE: DIS)? Today, we examine the outcome of a five year investment into the stock back in 2019.
Start date:  04/11/2019 


End date:  04/10/2024  
Start price/share:  $116.60  
End price/share:  $117.19  
Starting shares:  85.76  
Ending shares:  87.09  
Dividends reinvested/share:  $2.06  
Total return:  2.06%  
Average annual return:  0.41%  
Starting investment:  $10,000.00  
Ending investment:  $10,206.80 
The above analysis shows the five year investment result worked out as follows, with an annualized rate of return of 0.41%. This would have turned a $10K investment made 5 years ago into $10,206.80 today (as of 04/10/2024). On a total return basis, that’s a result of 2.06% (something to think about: how might DIS shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Walt Disney Co. paid investors a total of $2.06/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 .90/share, we calculate that DIS has a current yield of approximately 0.77%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .90 against the original $116.60/share purchase price. This works out to a yield on cost of 0.66%.
Another great investment quote to think about:
“Value investing means really asking what are the best values, and not assuming that because something looks expensive that it is, or assuming that because a stock is down in price and trades at low multiples that it is a bargain.” — Bill Miller