“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 decade-long holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into PayPal Holdings Inc (NASD: PYPL)? Today, we examine the outcome of a decade-long investment into the stock back in 2016.
| Start date: | 02/08/2016 |
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| End date: | 02/05/2026 | ||||
| Start price/share: | $33.61 | ||||
| End price/share: | $39.90 | ||||
| Starting shares: | 297.53 | ||||
| Ending shares: | 298.22 | ||||
| Dividends reinvested/share: | $0.14 | ||||
| Total return: | 18.99% | ||||
| Average annual return: | 1.75% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $11,894.44 | ||||
The above analysis shows the decade-long investment result worked out as follows, with an annualized rate of return of 1.75%. This would have turned a $10K investment made 10 years ago into $11,894.44 today (as of 02/05/2026). On a total return basis, that’s a result of 18.99% (something to think about: how might PYPL shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that PayPal Holdings Inc paid investors a total of $0.14/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 .56/share, we calculate that PYPL has a current yield of approximately 1.40%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .56 against the original $33.61/share purchase price. This works out to a yield on cost of 4.17%.
One more piece of investment wisdom to leave you with:
“Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.” — Peter Lynch
