“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 Schlumberger Ltd (NYSE: SLB)? Today, we examine the outcome of a ten year investment into the stock back in 2015.
| Start date: | 05/19/2015 |
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| End date: | 05/16/2025 | ||||
| Start price/share: | $90.56 | ||||
| End price/share: | $35.77 | ||||
| Starting shares: | 110.42 | ||||
| Ending shares: | 145.95 | ||||
| Dividends reinvested/share: | $13.91 | ||||
| Total return: | -47.79% | ||||
| Average annual return: | -6.29% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $5,222.27 | ||||
The above analysis shows the ten year investment result worked out poorly, with an annualized rate of return of -6.29%. This would have turned a $10K investment made 10 years ago into $5,222.27 today (as of 05/16/2025). On a total return basis, that’s a result of -47.79% (something to think about: how might SLB shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Schlumberger Ltd paid investors a total of $13.91/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 1.14/share, we calculate that SLB has a current yield of approximately 3.19%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.14 against the original $90.56/share purchase price. This works out to a yield on cost of 3.52%.
More investment wisdom to ponder:
“If you have trouble imagining a 20% loss in the stock market, you shouldn’t be in stocks.” — John Bogle
