“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 Target Corp (NYSE: TGT)? Today, we examine the outcome of a ten year investment into the stock back in 2015.
| Start date: | 09/09/2015 |
|
|||
| End date: | 09/08/2025 | ||||
| Start price/share: | $77.16 | ||||
| End price/share: | $91.50 | ||||
| Starting shares: | 129.60 | ||||
| Ending shares: | 173.80 | ||||
| Dividends reinvested/share: | $32.42 | ||||
| Total return: | 59.03% | ||||
| Average annual return: | 4.75% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $15,909.29 | ||||
The above analysis shows the ten year investment result worked out as follows, with an annualized rate of return of 4.75%. This would have turned a $10K investment made 10 years ago into $15,909.29 today (as of 09/08/2025). On a total return basis, that’s a result of 59.03% (something to think about: how might TGT shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Target Corp paid investors a total of $32.42/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 4.56/share, we calculate that TGT has a current yield of approximately 4.98%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 4.56 against the original $77.16/share purchase price. This works out to a yield on cost of 6.45%.
More investment wisdom to ponder:
“Know what you own and why you own it.” — Peter Lynch
