“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
The above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a ten year period?
Today, let’s look backwards in time to 2016, and take a look at what happened to investors who asked that very question about Lennar Corp (NYSE: LEN), by taking a look at the investment outcome over a ten year holding period.
| Start date: | 02/05/2016 |
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| End date: | 02/04/2026 | ||||
| Start price/share: | $37.63 | ||||
| End price/share: | $115.27 | ||||
| Starting shares: | 265.75 | ||||
| Ending shares: | 293.30 | ||||
| Dividends reinvested/share: | $9.49 | ||||
| Total return: | 238.08% | ||||
| Average annual return: | 12.95% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $33,818.33 | ||||
As we can see, the ten year investment result worked out quite well, with an annualized rate of return of 12.95%. This would have turned a $10K investment made 10 years ago into $33,818.33 today (as of 02/04/2026). On a total return basis, that’s a result of 238.08% (something to think about: how might LEN shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Lennar Corp paid investors a total of $9.49/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/share, we calculate that LEN has a current yield of approximately 1.74%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 2 against the original $37.63/share purchase price. This works out to a yield on cost of 4.62%.
One more piece of investment wisdom to leave you with:
“The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.” — Warren Buffett
