“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 Ralph Lauren Corp (NYSE: RL)? Today, we examine the outcome of a ten year investment into the stock back in 2015.
| Start date: | 07/02/2015 |
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| End date: | 07/01/2025 | ||||
| Start price/share: | $134.76 | ||||
| End price/share: | $272.10 | ||||
| Starting shares: | 74.21 | ||||
| Ending shares: | 90.89 | ||||
| Dividends reinvested/share: | $23.72 | ||||
| Total return: | 147.31% | ||||
| Average annual return: | 9.47% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $24,726.72 | ||||
The above analysis shows the ten year investment result worked out well, with an annualized rate of return of 9.47%. This would have turned a $10K investment made 10 years ago into $24,726.72 today (as of 07/01/2025). On a total return basis, that’s a result of 147.31% (something to think about: how might RL shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Ralph Lauren Corp paid investors a total of $23.72/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 3.65/share, we calculate that RL has a current yield of approximately 1.34%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 3.65 against the original $134.76/share purchase price. This works out to a yield on cost of 0.99%.
More investment wisdom to ponder:
“All intelligent investing is value investing: acquiring more that you are paying for. You must value the business in order to value the stock.” — Charlie Munger
