“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 Bristol Myers Squibb Co. (NYSE: BMY)? Today, we examine the outcome of a five year investment into the stock back in 2020.
| Start date: | 11/16/2020 |
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| End date: | 11/13/2025 | ||||
| Start price/share: | $64.50 | ||||
| End price/share: | $48.63 | ||||
| Starting shares: | 155.04 | ||||
| Ending shares: | 188.37 | ||||
| Dividends reinvested/share: | $11.28 | ||||
| Total return: | -8.40% | ||||
| Average annual return: | -1.74% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $9,160.63 | ||||
As we can see, the five year investment result worked out poorly, with an annualized rate of return of -1.74%. This would have turned a $10K investment made 5 years ago into $9,160.63 today (as of 11/13/2025). On a total return basis, that’s a result of -8.40% (something to think about: how might BMY shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Bristol Myers Squibb Co. paid investors a total of $11.28/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 2.48/share, we calculate that BMY has a current yield of approximately 5.10%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 2.48 against the original $64.50/share purchase price. This works out to a yield on cost of 7.91%.
One more piece of investment wisdom to leave you with:
“The most important thing about an investment philosophy is that you have one.” — David Booth
