“I buy on the assumption that they could close the market the next day and not reopen it for five years.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a five year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Constellation Brands Inc (NYSE: STZ)? Today, we examine the outcome of a five year investment into the stock back in 2020.
| Start date: | 09/16/2020 |
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| End date: | 09/15/2025 | ||||
| Start price/share: | $193.20 | ||||
| End price/share: | $135.42 | ||||
| Starting shares: | 51.76 | ||||
| Ending shares: | 55.97 | ||||
| Dividends reinvested/share: | $17.38 | ||||
| Total return: | -24.21% | ||||
| Average annual return: | -5.39% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $7,580.28 | ||||
As shown above, the five year investment result worked out poorly, with an annualized rate of return of -5.39%. This would have turned a $10K investment made 5 years ago into $7,580.28 today (as of 09/15/2025). On a total return basis, that’s a result of -24.21% (something to think about: how might STZ shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Constellation Brands Inc paid investors a total of $17.38/share in dividends over the 5 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 4.08/share, we calculate that STZ has a current yield of approximately 3.01%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 4.08 against the original $193.20/share purchase price. This works out to a yield on cost of 1.56%.
One more investment quote to leave you with:
“The investor’s chief problem, even his worst enemy, is likely to be himself.” — Benjamin Graham
