“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a two-decade holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into MGM Resorts International (NYSE: MGM)? Today, we examine the outcome of a two-decade investment into the stock back in 2006.
| Start date: | 01/17/2006 |
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| End date: | 01/15/2026 | ||||
| Start price/share: | $36.90 | ||||
| End price/share: | $35.41 | ||||
| Starting shares: | 271.00 | ||||
| Ending shares: | 287.27 | ||||
| Dividends reinvested/share: | $1.62 | ||||
| Total return: | 1.72% | ||||
| Average annual return: | 0.09% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $10,181.62 | ||||
The above analysis shows the two-decade investment result worked out as follows, with an annualized rate of return of 0.09%. This would have turned a $10K investment made 20 years ago into $10,181.62 today (as of 01/15/2026). On a total return basis, that’s a result of 1.72% (something to think about: how might MGM shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that MGM Resorts International paid investors a total of $1.62/share in dividends over the 20 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 .01/share, we calculate that MGM has a current yield of approximately 0.00%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .01 against the original $36.90/share purchase price. This works out to a yield on cost of 0.00%.
More investment wisdom to ponder:
“All intelligent investing is value investing: acquiring more that you are paying for. You must value the business in order to value the stock.” — Charlie Munger
