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“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
Investors can learn a great deal from Warren Buffett, whose quote above highlights the importance of thinking carefully about investment time horizon, and asking ourselves before buying any given stock: can we envision holding onto it for years — even a two-decade holding period, possibly?
Suppose a buy-and-hold investor was considering an investment into Simon Property Group, Inc. (NYSE: SPG) back in 2006. Back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full two-decade investment time horizon and then actually held for these past 20 years, here is how that investment would have turned out.
| Start date: | 03/10/2006 |
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| End date: | 03/09/2026 | ||||
| Start price/share: | $77.30 | ||||
| End price/share: | $192.83 | ||||
| Starting shares: | 129.37 | ||||
| Ending shares: | 297.10 | ||||
| Dividends reinvested/share: | $107.91 | ||||
| Total return: | 472.89% | ||||
| Average annual return: | 9.12% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $57,332.21 | ||||
As shown above, the two-decade investment result worked out well, with an annualized rate of return of 9.12%. This would have turned a $10K investment made 20 years ago into $57,332.21 today (as of 03/09/2026). On a total return basis, that is a result of 472.89%.
Over that period, Simon Property Group delivered this performance despite navigating several major market and sector-specific stresses, including the 2008–2009 Global Financial Crisis, the secular rise of e-commerce and “retail apocalypse” concerns, and the COVID-19 pandemic, which forced temporary closures of many of its properties in 2020. The company preserved its investment-grade balance sheet and, after a pandemic-related dividend reduction, has resumed growing its dividend in recent years.
Something to consider: how might SPG shares perform over the next 20 years, given its position as one of the largest owners of high-quality Class A malls and premium outlets globally, and its strategy of redeveloping properties into mixed-use destinations that combine retail, residential, entertainment, and experiential components?
These numbers were computed with the
Dividend Channel
DRIP Returns Calculator. As with any backtest, they assume dividend reinvestment with no taxes or transaction costs, and do not guarantee future results.
Always an important consideration with a dividend-paying company is whether to reinvest dividends. Over the past 20 years, Simon Property Group, Inc. has paid $107.91/share in dividends. For the above analysis, we assume that the investor reinvests dividends into new shares of stock. For the above calculations, the reinvestment is performed using the closing price on the ex-dividend date for each dividend.
This reinvestment meaningfully increased the investor’s share count from 129.37 shares at the start to 297.10 shares at the end of the period. In other words, more than half of the total ending position is attributable to reinvested dividends rather than the original capital alone — a concrete illustration of the power of compounding for long-horizon income investors.
Based upon the most recent annualized dividend rate of 8.8/share, we calculate that SPG has a current yield of approximately 4.56%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 8.8 against the original $77.30/share purchase price. This works out to a yield on cost of 5.90%.
For long-term income-focused shareholders, this rising yield on cost underscores why some investors are willing to tolerate near-term volatility in cyclically sensitive sectors such as retail real estate. As cash flows recover and dividends grow over time, the effective income stream on the original capital outlay can become quite substantial, even if the headline dividend yield for new buyers remains in a more typical mid-single-digit range.
Of course, SPG is structured as a real estate investment trust (REIT), which means it is required to distribute at least 90% of its taxable income to shareholders in the form of dividends. That structure has historically made the stock attractive to income-oriented investors, but it also makes the dividend sensitive to changes in rental income, occupancy levels, and balance sheet leverage. Investors evaluating SPG today should therefore consider factors such as its:
- Portfolio quality and geographic diversification across U.S. and international markets
- Occupancy levels and leasing spreads on renewals and new leases
- Development and redevelopment pipeline, particularly mixed-use and experiential projects
- Balance sheet strength, debt maturity schedule, and interest-rate exposure
- Track record of capital allocation, including share repurchases, acquisitions, and joint ventures
Long-term investors who commit to a 10- or 20-year horizon need to be comfortable not only with the company’s current fundamentals but also with how its business model is likely to evolve as consumer behavior continues to shift and as the real estate cycle progresses.
More investment wisdom to ponder:
“Investors should purchase stocks like they purchase groceries, not like they purchase perfume.” — Benjamin Graham
The SPG case study above is a reminder that a disciplined, valuation-conscious approach to buying durable businesses — and then holding them through multiple cycles while reinvesting dividends — can, over time, generate wealth in a manner that aligns closely with the philosophies of Buffett and Graham.
