“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 Everest Group Ltd (NYSE: EG)? Today, we examine the outcome of a two-decade investment into the stock back in 2005.
| Start date: | 07/28/2005 |
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| End date: | 07/25/2025 | ||||
| Start price/share: | $97.47 | ||||
| End price/share: | $336.86 | ||||
| Starting shares: | 102.60 | ||||
| Ending shares: | 153.89 | ||||
| Dividends reinvested/share: | $76.58 | ||||
| Total return: | 418.38% | ||||
| Average annual return: | 8.57% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $51,807.48 | ||||
As shown above, the two-decade investment result worked out well, with an annualized rate of return of 8.57%. This would have turned a $10K investment made 20 years ago into $51,807.48 today (as of 07/25/2025). On a total return basis, that’s a result of 418.38% (something to think about: how might EG shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Everest Group Ltd paid investors a total of $76.58/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 8/share, we calculate that EG has a current yield of approximately 2.37%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 8 against the original $97.47/share purchase price. This works out to a yield on cost of 2.43%.
One more investment quote to leave you with:
“While it might seem that anyone can be a value investor, the essential characteristics of this type of investor-patience, discipline, and risk aversion-may well be genetically determined.” — Seth Klarman
