“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 Yum! Brands Inc (NYSE: YUM)? Today, we examine the outcome of a ten year investment into the stock back in 2015.
| Start date: | 10/28/2015 |
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| End date: | 10/27/2025 | ||||
| Start price/share: | $52.46 | ||||
| End price/share: | $142.98 | ||||
| Starting shares: | 190.62 | ||||
| Ending shares: | 228.62 | ||||
| Dividends reinvested/share: | $19.07 | ||||
| Total return: | 226.88% | ||||
| Average annual return: | 12.57% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $32,697.04 | ||||
As we can see, the ten year investment result worked out quite well, with an annualized rate of return of 12.57%. This would have turned a $10K investment made 10 years ago into $32,697.04 today (as of 10/27/2025). On a total return basis, that’s a result of 226.88% (something to think about: how might YUM shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Yum! Brands Inc paid investors a total of $19.07/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 2.84/share, we calculate that YUM has a current yield of approximately 1.99%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 2.84 against the original $52.46/share purchase price. This works out to a yield on cost of 3.79%.
Another great investment quote to think about:
“You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.” — Warren Buffett
