“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 Kimberly-Clark Corp. (NASD: KMB)? Today, we examine the outcome of a five year investment into the stock back in 2021.
| Start date: | 03/05/2021 |
|
|||
| End date: | 03/04/2026 | ||||
| Start price/share: | $131.59 | ||||
| End price/share: | $104.73 | ||||
| Starting shares: | 75.99 | ||||
| Ending shares: | 90.44 | ||||
| Dividends reinvested/share: | $22.70 | ||||
| Total return: | -5.28% | ||||
| Average annual return: | -1.08% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $9,471.54 | ||||
As we can see, the five year investment result worked out poorly, with an annualized rate of return of -1.08%. This would have turned a $10K investment made 5 years ago into $9,471.54 today (as of 03/04/2026). On a total return basis, that’s a result of -5.28% (something to think about: how might KMB shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Kimberly-Clark Corp. paid investors a total of $22.70/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 5.12/share, we calculate that KMB has a current yield of approximately 4.89%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 5.12 against the original $131.59/share purchase price. This works out to a yield on cost of 3.72%.
Another great investment quote to think about:
“If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.” — Peter Lynch
