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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 Loews Corp. (NYSE: L)? Today, we examine the outcome of a ten year investment into the stock back in 2014.

Start date: 05/16/2014


End date: 05/15/2024
Start price/share: $42.55
End price/share: $76.62
Starting shares: 235.02
Ending shares: 247.70
Dividends reinvested/share: $2.52
Total return: 89.79%
Average annual return: 6.61%
Starting investment: $10,000.00
Ending investment: $18,972.81

As we can see, the ten year investment result worked out well, with an annualized rate of return of 6.61%. This would have turned a $10K investment made 10 years ago into $18,972.81 today (as of 05/15/2024). On a total return basis, that’s a result of 89.79% (something to think about: how might L shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Loews Corp. paid investors a total of $2.52/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 .25/share, we calculate that L has a current yield of approximately 0.33%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .25 against the original $42.55/share purchase price. This works out to a yield on cost of 0.78%.

Here’s one more great investment quote before you go:
“People who succeed in the stock market also accept periodic losses, setbacks, and unexpected occurrences. Calamitous drops do not scare them out of the game.” — Peter Lynch