“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 United Parcel Service Inc (NYSE: UPS)? Today, we examine the outcome of a ten year investment into the stock back in 2015.
| Start date: | 06/25/2015 |
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| End date: | 06/24/2025 | ||||
| Start price/share: | $98.94 | ||||
| End price/share: | $100.62 | ||||
| Starting shares: | 101.07 | ||||
| Ending shares: | 142.42 | ||||
| Dividends reinvested/share: | $45.86 | ||||
| Total return: | 43.30% | ||||
| Average annual return: | 3.66% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $14,328.40 | ||||
The above analysis shows the ten year investment result worked out as follows, with an annualized rate of return of 3.66%. This would have turned a $10K investment made 10 years ago into $14,328.40 today (as of 06/24/2025). On a total return basis, that’s a result of 43.30% (something to think about: how might UPS shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that United Parcel Service Inc paid investors a total of $45.86/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 6.56/share, we calculate that UPS has a current yield of approximately 6.52%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 6.56 against the original $98.94/share purchase price. This works out to a yield on cost of 6.59%.
One more investment quote to leave you with:
“Don’t look for the needle in the haystack, just buy the haystack.” — John Bogle
