“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— 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 NextEra Energy Inc (NYSE: NEE)? Today, we examine the outcome of a two-decade investment into the stock back in 2005.
| Start date: | 09/12/2005 |
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| End date: | 09/09/2025 | ||||
| Start price/share: | $11.35 | ||||
| End price/share: | $70.07 | ||||
| Starting shares: | 881.06 | ||||
| Ending shares: | 1,595.89 | ||||
| Dividends reinvested/share: | $20.08 | ||||
| Total return: | 1,018.24% | ||||
| Average annual return: | 12.83% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $111,886.84 | ||||
As we can see, the two-decade investment result worked out quite well, with an annualized rate of return of 12.83%. This would have turned a $10K investment made 20 years ago into $111,886.84 today (as of 09/09/2025). On a total return basis, that’s a result of 1,018.24% (something to think about: how might NEE shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that NextEra Energy Inc paid investors a total of $20.08/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 2.266/share, we calculate that NEE has a current yield of approximately 3.23%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 2.266 against the original $11.35/share purchase price. This works out to a yield on cost of 28.46%.
One more investment quote to leave you with:
“As in roulette, same is true of the stock trader, who will find that the expense of trading weights the dice heavily against him.” — Benjamin Graham
