“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
The above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a ten year period?
Today, let’s look backwards in time to 2015, and take a look at what happened to investors who asked that very question about Kroger Co (NYSE: KR), by taking a look at the investment outcome over a ten year holding period.
| Start date: | 10/07/2015 |
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| End date: | 10/06/2025 | ||||
| Start price/share: | $37.51 | ||||
| End price/share: | $64.80 | ||||
| Starting shares: | 266.60 | ||||
| Ending shares: | 325.28 | ||||
| Dividends reinvested/share: | $7.89 | ||||
| Total return: | 110.78% | ||||
| Average annual return: | 7.74% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $21,083.71 | ||||
As we can see, the ten year investment result worked out well, with an annualized rate of return of 7.74%. This would have turned a $10K investment made 10 years ago into $21,083.71 today (as of 10/06/2025). On a total return basis, that’s a result of 110.78% (something to think about: how might KR shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Kroger Co paid investors a total of $7.89/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 1.4/share, we calculate that KR has a current yield of approximately 2.16%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.4 against the original $37.51/share purchase price. This works out to a yield on cost of 5.76%.
One more piece of investment wisdom 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
