“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 Jabil Inc (NYSE: JBL)? Today, we examine the outcome of a five year investment into the stock back in 2020.
| Start date: | 02/13/2020 |
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| End date: | 02/12/2025 | ||||
| Start price/share: | $39.12 | ||||
| End price/share: | $168.83 | ||||
| Starting shares: | 255.62 | ||||
| Ending shares: | 262.47 | ||||
| Dividends reinvested/share: | $1.60 | ||||
| Total return: | 343.12% | ||||
| Average annual return: | 34.66% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $44,314.63 | ||||
As shown above, the five year investment result worked out exceptionally well, with an annualized rate of return of 34.66%. This would have turned a $10K investment made 5 years ago into $44,314.63 today (as of 02/12/2025). On a total return basis, that’s a result of 343.12% (something to think about: how might JBL shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Jabil Inc paid investors a total of $1.60/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 .32/share, we calculate that JBL has a current yield of approximately 0.19%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .32 against the original $39.12/share purchase price. This works out to a yield on cost of 0.49%.
One more piece of investment wisdom to leave you with:
“We don’t have to be smarter than the rest. We have to be more disciplined than the rest.” — Warren Buffett
