“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
A long holding period can materially change the outcome of an equity investment, particularly when dividends are reinvested. That is clear in the case of Extra Space Storage Inc (NYSE: EXR), a self-storage real estate investment trust, where a $10,000 investment made in April 2006 compounded into a substantially larger sum over the following 20 years.
Using a dividend reinvestment framework, the investment grew to $195,181.49 as of 04/22/2026. That equates to a total return of 1,852.40% and an average annual return of 16.01%. The result underscores two drivers of long-term wealth creation: price appreciation and the steady accumulation of additional shares through reinvested cash distributions.
EXR 20-Year Return Details
| Start date: | 04/24/2006 |
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| End date: | 04/22/2026 | ||||
| Start price/share: | $15.90 | ||||
| End price/share: | $141.29 | ||||
| Starting shares: | 628.93 | ||||
| Ending shares: | 1,381.84 | ||||
| Dividends reinvested/share: | $58.21 | ||||
| Total return: | 1,852.40% | ||||
| Average annual return: | 16.01% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $195,181.49 | ||||
The gain was driven by more than the increase in EXR’s share price from $15.90 to $141.29. Reinvested dividends increased the share count from 628.93 shares at inception to 1,381.84 shares at the end of the period. That share growth is central to understanding long-term total return: each dividend purchased additional shares, and those shares then participated in future dividend payments and price appreciation.
[These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
What Drove EXR’s Long-Term Return?
Extra Space Storage operates in the self-storage segment of the REIT market, a property type often noted for relatively short lease durations, recurring customer demand, and the ability to reprice rents more frequently than many other real estate categories. Over long periods, those features can support cash-flow growth, especially when paired with disciplined capital allocation and portfolio expansion.
In EXR’s case, the 20-year return profile reflects three reinforcing elements:
- Underlying share price appreciation: the stock rose materially over the period.
- Meaningful cash distributions: shareholders received substantial cumulative dividends.
- Dividend reinvestment: those distributions translated into a much larger ending share count.
Together, those factors produced a result that far exceeded what price appreciation alone would suggest. For dividend-paying REITs in particular, evaluating total return rather than price return is essential, because distributions are a large part of the investment case.
Why Dividend Reinvestment Matters
Over the 20-year period shown above, EXR paid $58.21 per share in cumulative dividends. Reinvesting those payments magnified the investment outcome by steadily increasing the number of shares owned. That mechanism is especially powerful over long horizons, because compounding becomes more visible in later years as the base of owned shares grows.
In practical terms, dividend reinvestment changes the return equation in two ways:
- Each cash dividend buys incremental shares.
- Those incremental shares generate their own future dividends.
- If the stock price rises over time, the larger share base lifts ending portfolio value.
The calculations above assume dividends were reinvested at the closing price on each ex-dividend date. That approach illustrates how a DRIP-style strategy can compound returns over an extended period.
Current Yield and Yield on Cost
Based on the most recent annualized dividend rate of $6.48 per share, EXR has a current yield of approximately 4.59% using the ending share price of $141.29. That is the forward-looking cash yield implied by the latest annualized payout rate and the recent share price.
A separate concept is yield on cost, which compares the current annualized dividend with the original purchase price. Using the 2006 entry price of $15.90 per share, the current annualized dividend of $6.48 implies a yield on cost of 40.75%.
This is different from current yield. Current yield answers the question, “What is the stock yielding today at today’s price?” Yield on cost answers, “What is today’s dividend relative to the original purchase price?” For long-term holdings with substantial dividend growth, the difference can become very large.
Key Takeaways
- A $10,000 investment in EXR on 04/24/2006 grew to $195,181.49 by 04/22/2026 with dividends reinvested.
- The total return was 1,852.40%, or 16.01% annualized.
- Share count more than doubled, rising from 628.93 to 1,381.84 through reinvestment.
- Cumulative dividends paid over the period totaled $58.21 per share.
- At an annualized dividend rate of $6.48, EXR’s current yield is approximately 4.59%, while yield on cost based on the 2006 purchase price is about 40.75%.
The broader lesson is straightforward: in a dividend-paying REIT, long-term total return is not captured by the stock chart alone. The combination of distributions, reinvestment, and time can substantially alter the final result.
“Those who do not remember the past are condemned to repeat it.” — George Santayana
