“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 Thermo Fisher Scientific Inc (NYSE: TMO)? Today, we examine the outcome of a five year investment into the stock back in 2021.
| Start date: | 01/13/2021 |
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| End date: | 01/12/2026 | ||||
| Start price/share: | $501.71 | ||||
| End price/share: | $615.45 | ||||
| Starting shares: | 19.93 | ||||
| Ending shares: | 20.20 | ||||
| Dividends reinvested/share: | $6.92 | ||||
| Total return: | 24.29% | ||||
| Average annual return: | 4.45% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $12,432.03 | ||||
As shown above, the five year investment result worked out as follows, with an annualized rate of return of 4.45%. This would have turned a $10K investment made 5 years ago into $12,432.03 today (as of 01/12/2026). On a total return basis, that’s a result of 24.29% (something to think about: how might TMO shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Thermo Fisher Scientific Inc paid investors a total of $6.92/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 1.72/share, we calculate that TMO has a current yield of approximately 0.28%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.72 against the original $501.71/share purchase price. This works out to a yield on cost of 0.06%.
One more investment quote to leave you with:
“Never test the depth of a river with both feet.” — Warren Buffett
