“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 Las Vegas Sands Corp (NYSE: LVS)? Today, we examine the outcome of a five year investment into the stock back in 2019.
| Start date: | 09/27/2019 |
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| End date: | 09/26/2024 | ||||
| Start price/share: | $57.11 | ||||
| End price/share: | $48.40 | ||||
| Starting shares: | 175.10 | ||||
| Ending shares: | 184.30 | ||||
| Dividends reinvested/share: | $2.56 | ||||
| Total return: | -10.80% | ||||
| Average annual return: | -2.26% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $8,919.38 | ||||
As we can see, the five year investment result worked out poorly, with an annualized rate of return of -2.26%. This would have turned a $10K investment made 5 years ago into $8,919.38 today (as of 09/26/2024). On a total return basis, that’s a result of -10.80% (something to think about: how might LVS shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Las Vegas Sands Corp paid investors a total of $2.56/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 .8/share, we calculate that LVS has a current yield of approximately 1.65%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .8 against the original $57.11/share purchase price. This works out to a yield on cost of 2.89%.
One more investment quote to leave you with:
“Go for a business that any idiot can run – because sooner or later, any idiot probably is going to run it.” — Peter Lynch
