“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a two-decade holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Intel Corp (NASD: INTC)? Today, we examine the outcome of a two-decade investment into the stock back in 2005.
| Start date: | 04/11/2005 |
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| End date: | 04/08/2025 | ||||
| Start price/share: | $23.12 | ||||
| End price/share: | $18.13 | ||||
| Starting shares: | 432.53 | ||||
| Ending shares: | 745.77 | ||||
| Dividends reinvested/share: | $17.11 | ||||
| Total return: | 35.21% | ||||
| Average annual return: | 1.52% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $13,522.85 | ||||
As we can see, the two-decade investment result worked out as follows, with an annualized rate of return of 1.52%. This would have turned a $10K investment made 20 years ago into $13,522.85 today (as of 04/08/2025). On a total return basis, that’s a result of 35.21% (something to think about: how might INTC shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Intel Corp paid investors a total of $17.11/share in dividends over the 20 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 .5/share, we calculate that INTC has a current yield of approximately 2.76%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .5 against the original $23.12/share purchase price. This works out to a yield on cost of 11.94%.
Another great investment quote to think about:
“You’ve got to be careful if you don’t know where you’re going, ’cause you might not get there.” — Yogi Berra
