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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 investment philosophy practiced by Warren Buffett calls for investors to take a long-term horizon when making an investment, such as a decade-long holding period (or even longer), and reconsider making the investment in the first place if unable to envision holding the stock for at least five years. Today, we look at how such a long-term strategy would have done for investors in TE Connectivity Ltd (NYSE: TEL) back in 2014, holding through to today.

Start date: 06/05/2014


End date: 06/04/2024
Start price/share: $61.24
End price/share: $148.19
Starting shares: 163.29
Ending shares: 197.28
Dividends reinvested/share: $18.04
Total return: 192.35%
Average annual return: 11.32%
Starting investment: $10,000.00
Ending investment: $29,240.66

As we can see, the decade-long investment result worked out quite well, with an annualized rate of return of 11.32%. This would have turned a $10K investment made 10 years ago into $29,240.66 today (as of 06/04/2024). On a total return basis, that’s a result of 192.35% (something to think about: how might TEL shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Always an important consideration with a dividend-paying company is: should we reinvest our dividends?Over the past 10 years, TE Connectivity Ltd has paid $18.04/share in dividends. For the above analysis, we assume that the investor reinvests dividends into new shares of stock (for the above calculations, the reinvestment is performed using closing price on ex-div date for that dividend).

Based upon the most recent annualized dividend rate of 2.6/share, we calculate that TEL has a current yield of approximately 1.75%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 2.6 against the original $61.24/share purchase price. This works out to a yield on cost of 2.86%.

One more investment quote to leave you with:
“When the public is most frightened, only the strong are left, and that’s when the market is in the best possible hands.” — Victor Niederhoffer