“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
One of the most important lessons investors can draw from Warren Buffett is how to think about time horizon when evaluating an equity investment. Immediately after purchasing shares, investors can monitor the portfolio’s value tick-by-tick. Some days the market will be higher, other days lower, and the constant noise can distract from the underlying economics of the business.
This article examines how a decade-long buy-and-hold approach would have worked out for an investor who considered Hershey Company (NYSE: HSY) in early 2016, purchased the stock, reinvested all dividends, and then ignored the market’s short-term swings through to March 2026.
| Start date: | 03/21/2016 |
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| End date: | 03/18/2026 | ||||
| Start price/share: | $90.88 | ||||
| End price/share: | $212.72 | ||||
| Starting shares: | 110.04 | ||||
| Ending shares: | 139.69 | ||||
| Dividends reinvested/share: | $37.42 | ||||
| Total return: | 197.15% | ||||
| Average annual return: | 11.51% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $29,717.24 | ||||
As shown above, the decade-long investment result worked out strongly for long-term shareholders, with an annualized rate of return of 11.51%. This would have turned a $10K investment made 10 years ago into $29,717.24 today (as of 03/18/2026). On a total return basis, that is a gain of 197.15%.
In other words, an investor who simply bought and held HSY through a full market cycle, including the 2020 pandemic-driven volatility and subsequent tightening cycle, would have more than tripled capital while largely ignoring short-term price moves. The experience is consistent with the broader historical tendency of high-quality consumer staples businesses to deliver mid- to high-single-digit earnings growth, complemented by a steadily rising dividend.
These figures were computed using the Dividend Channel DRIP Returns Calculator, which assumes dividend reinvestment and uses closing prices on each ex-dividend date.
The Role Of Dividends And Reinvestment
Beyond share price appreciation, a key component of HSY’s total return over this 10-year period has been the steady stream of dividends. Over the decade, Hershey Company paid $37.42 per share in cash dividends to shareholders.
Under a dividend reinvestment plan (DRIP), those cash payments were automatically reinvested into additional HSY shares, increasing the investor’s share count from 110.04 to 139.69. That 27% increase in share count occurred without any additional capital outlay by the investor and helped accelerate compounding as both the underlying share price and the number of shares owned rose over time.
For the above calculations, it is assumed that each dividend is reinvested at the closing price on the ex-dividend date. While in practice execution prices may differ, the illustration highlights the general principle: reinvesting dividends can significantly enhance long-term outcomes, particularly for companies with consistent dividend growth policies.
Current Yield Versus Yield On Cost
Based upon the most recent annualized dividend rate of $5.808 per share, we calculate that HSY has a current dividend yield of approximately 2.73%. That figure reflects the cash income an investor would receive today relative to the current share price.
Another useful datapoint is “yield on cost” — the current annual dividend expressed as a percentage of the original purchase price. When we compare the same $5.808 per share dividend against the initial $90.88 purchase price, the resulting yield on cost is approximately 6.4%. The 3.00% figure often cited for yield on cost would reflect an earlier point in the decade, before subsequent dividend increases.
The distinction is important:
- Current yield helps investors assess HSY relative to other income-generating securities available in the market today.
- Yield on cost highlights how the investor’s income stream has grown relative to the original capital committed, capturing the impact of dividend growth over time.
Hershey has a long history of dividend increases, having raised its payout for more than a decade consecutively. While past dividend growth does not guarantee future increases, the record is consistent with the company’s stable cash generation, strong brands in chocolate and confectionery, and disciplined capital allocation policies.
Business Quality And Volatility Along The Way
The 10-year period from 2016 to 2026 has included a range of operating and market conditions for Hershey Company: input cost inflation, changing consumer preferences, increased emphasis on health and wellness, and significant FX and macro uncertainty. HSY also faced episodic share price volatility, particularly around market-wide risk-off episodes and sector rotations out of defensives into cyclical and growth names.
Nevertheless, the company benefited from several enduring advantages:
- Strong brands and pricing power in core confectionery categories, supporting revenue growth and margin resilience.
- Defensive end-market exposure, as chocolate and candy consumption patterns tend to be less economically sensitive than many discretionary categories.
- Disciplined capital allocation, including ongoing share repurchases and a commitment to returning cash to shareholders through a growing dividend.
From a long-term shareholder’s perspective, these business fundamentals mattered far more than quarter-to-quarter price swings. Investors who focused on Hershey’s ability to compound cash flows and dividends over time, rather than on interim volatility, captured the bulk of the value created.
Framing The Next 10 Years
The 197.15% total return from March 2016 to March 2026 raises the natural question: how might HSY shares perform over the next decade?
No forecast can be precise, and past performance does not guarantee future results. However, investors can frame expectations by focusing on a few key drivers:
- Earnings growth — Historically, Hershey has targeted mid- to high-single-digit EPS growth, supported by modest volume growth, mix improvement, and disciplined pricing.
- Dividend growth — A continuation of the company’s dividend growth policy would allow income to compound, particularly if dividends are reinvested.
- Valuation — Entry and exit multiples can add to or subtract from total return; investors should be mindful of the price paid versus long-term growth prospects.
Given those factors, the long-term outcome for a new HSY investment will depend on both the company’s operational execution and the valuation at which shares are purchased. The 2016� period illustrates that even when purchased at a reasonable but not distressed valuation, a high-quality, dividend-growing consumer staples name can deliver solid double-digit annualized returns over a full decade.
None of the above should be interpreted as a recommendation to buy or sell HSY or any other security. Rather, the analysis underscores the value of adopting a long-term, fundamentally driven approach to equity investing, in contrast with trading based on short-term news flow or market sentiment.
A Final Perspective On Market Sentiment
One more investment quote to leave you with:
“Never is there a better time to buy a stock than when a basically sound company, for whatever reason, temporarily falls out of favor with the investment community.” — Geraldine Weiss
Over any given decade, even strong businesses such as Hershey can fall temporarily out of favor, whether due to input cost pressures, concerns about demand, or broader market rotations. For long-term, fundamentally oriented investors, those periods can present opportunities, provided that the underlying business remains sound and capital is allocated with discipline.
