“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
Investors can learn a lot from Warren Buffett, whose quote above underscores the importance of thinking in terms of a genuine investment time horizon rather than a trading horizon. Before buying any given stock, a long-term investor might reasonably ask: can we envision holding onto this position for years — even a full decade — regardless of interim market noise?
Consider a hypothetical “buy-and-hold” investor evaluating Consolidated Edison Inc ( NYSE: ED ) back in 2016. At that time, such an investor may well have been pondering this very question around a 10-year holding period. Had they answered “yes” and then actually held the stock for the ensuing decade, here is how that investment would have turned out.
| Start date: | 04/15/2016 |
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| End date: | 04/14/2026 | ||||
| Start price/share: | $75.85 | ||||
| End price/share: | $111.66 | ||||
| Starting shares: | 131.84 | ||||
| Ending shares: | 188.86 | ||||
| Dividends reinvested/share: | $30.76 | ||||
| Total return: | 110.88% | ||||
| Average annual return: | 7.74% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $21,079.41 | ||||
As we can see, the decade-long investment result worked out favorably for the hypothetical long-term shareholder, with an annualized rate of return of 7.74%. That would have turned a $10,000 investment made 10 years ago into $21,079.41 as of 04/14/2026. On a total return basis, that represents an increase of 110.88% — a reminder that time in the market and the compounding of dividends can materially shape long-horizon outcomes. (And naturally, it invites the follow-up question: how might ED shares perform over the next 10 years?) [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Many income-focused investors refuse to own any stock that does not pay a dividend. In the case of Consolidated Edison Inc, investors have received $30.76 per share in dividends over the 10-year period examined above, assuming the dividends were reinvested. That figure highlights an important point: total return was driven not just by share price appreciation, but also by the steady stream of cash distributions — and by the investor’s decision about what to do with those distributions.
In this exercise, the assumption is that dividends are reinvested — i.e., used to purchase additional shares through a dividend reinvestment plan, with the calculations based on closing prices on the ex-dividend date. This reinvestment helped grow the position from 131.84 starting shares to 188.86 ending shares, illustrating how a stable utility dividend can incrementally increase ownership over time without the investor adding new capital.
Consolidated Edison has long been regarded as a classic defensive utility holding. The company delivers electricity, gas, and steam to customers in the New York metropolitan area through its regulated subsidiaries, and its earnings profile tends to be less cyclical than that of many industrials or consumer cyclicals. For long-term income investors, that relative stability can make dividend sustainability and gradual growth more predictable, particularly when supported by regulatory frameworks that allow a reasonable return on invested capital.
Based upon the most recent annualized dividend rate of $3.55 per share, we calculate that ED has a current yield of approximately 3.18%. Another useful datapoint to examine is “yield on cost” — in other words, expressing the current annualized dividend of $3.55 against the original $75.85 per share purchase price. On that basis, the yield on cost works out to 4.19%. For an investor who bought in 2016 and held, each original dollar invested is now generating a meaningfully higher income yield than the headline current yield might suggest.
It is also worth noting that Consolidated Edison has a multi-decade track record of annual dividend increases, placing it among the so-called “Dividend Aristocrats” within the broader U.S. equity universe. While the pace of those increases has historically been modest, the combination of a regulated business model, steady capital investment, and a conservative payout policy has allowed the company to continue raising its dividend through varied interest-rate and economic cycles.
From a portfolio-construction standpoint, the 7.74% annualized return over the last decade from ED sits in a middle ground: below the most robust segments of the U.S. equity market in a strong bull period, yet comfortably ahead of cash and many intermediate-term bond returns over the same window, particularly on a risk-adjusted basis. For investors prioritizing capital preservation, income, and lower volatility, such a profile may be attractive, especially when combined with the behavioral advantages that often accompany owning steadier, lower-beta holdings.
Naturally, prospective investors should recognize the key risks as well: regulated utilities remain sensitive to interest-rate levels (given their capital intensity and the bond-like characteristics of their dividends), to regulatory decisions in their service territories, and to evolving capital requirements associated with decarbonization, grid modernization, and infrastructure resilience. These factors will help determine whether the next decade’s returns from ED resemble, exceed, or fall short of the decade reviewed here.
One more piece of investment wisdom to leave you with:
“Behind every stock is a company. Find out what it’s doing.” — Peter Lynch
