“I buy on the assumption that they could close the market the next day and not reopen it for five years.”
— Warren Buffett
The long-term, business-owner mindset championed by Warren Buffett invites investors to judge an equity position over at least one full market cycle, rather than over months or quarters. A five-year horizon is a practical interpretation of that philosophy, capturing both favorable and adverse operating conditions.
With that framework in mind, it is instructive to examine what such a “buy and hold” approach would have meant for investors in FedEx Corp (NYSE: FDX) who initiated a position in early April 2021 and maintained it through early April 2026.
| Start date: | 04/05/2021 |
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| End date: | 04/02/2026 | ||||
| Start price/share: | $281.57 | ||||
| End price/share: | $361.63 | ||||
| Starting shares: | 35.52 | ||||
| Ending shares: | 39.14 | ||||
| Dividends reinvested/share: | $23.96 | ||||
| Total return: | 41.55% | ||||
| Average annual return: | 7.21% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $14,158.29 | ||||
As shown above, the five-year investment result worked out solidly for long-term holders, with an annualized rate of return of 7.21% on a total return basis. A hypothetical $10,000 investment made five years ago would have grown to $14,158.29 as of 04/02/2026, assuming dividends were fully reinvested. That amounts to a cumulative total return of 41.55% over the period.
Importantly, this performance span covers a highly volatile operating backdrop for a global transportation company. From 2021 through 2023, FedEx navigated:
- Strong e-commerce and parcel volume in the immediate aftermath of the COVID-19 pandemic;
- Significant cost inflation in labor, fuel, and purchased transportation;
- Normalization of package volumes as consumers shifted back toward services and in-store retail; and
- A higher interest-rate environment and concerns regarding cyclical freight demand.
Despite those cross-currents, the period ultimately delivered a positive compounded outcome for investors who remained invested and allowed dividends to compound via reinvestment.
Many income-focused investors insist on an explicit cash-return component when evaluating equities. In the case of FedEx Corp, investors received $23.96 per share in dividends over the five-year window used in this exercise. That dividend stream contributed meaningfully to the outcome: total return was driven by both capital appreciation (the share price rising from $281.57 to $361.63) and the cash distributions that were reinvested into additional shares.
For this illustration, dividends are assumed to be reinvested — i.e., used to purchase additional FedEx shares on each ex-dividend date at the closing price. That is why the share count rises from 35.52 at inception to 39.14 shares by April 2026. Over multiple years, even a modest yield can add incremental share exposure and magnify the impact of subsequent price moves.
Based upon the most recent annualized dividend rate of 5.8 per share, we calculate that FDX has a current yield of approximately 1.60%. While that headline yield level will not screen as high when compared with utilities, REITs, or higher-yielding financials, it is important to recognize that FedEx has, in recent years, emphasized dividend growth and capital returns as part of its broader shareholder-value proposition.
Another useful lens is ‘yield on cost’ — in other words, expressing the current annualized dividend of 5.8 per share against the original $281.57 purchase price from April 2021. This works out to a yield on cost of 2.06%, meaning that, relative to the initial entry price, the income component has become more meaningful over time as the dividend has increased. This illustrates how a company with a moderate current yield can become a more attractive income generator for long-term holders if management pursues a consistent dividend-growth policy.
Beyond the dividend, FedEx has also focused on margin improvement and capital discipline. The company’s multi-year “DRIVE” initiative has targeted cost reductions and network optimization across the FedEx Express, Ground, and Freight segments, with an aim to structurally enhance profitability through the cycle. Management has also utilized share repurchases as another lever of capital return, a factor that does not appear directly in the dividend statistics but can enhance per-share earnings and, over time, support valuation.
Five-year snapshots such as this one are backward-looking by design and should not be interpreted as a forecast. That said, they can be useful in stress-testing one’s own investment process. An investor who bought FedEx in 2021 would have experienced periods of drawdown, headline risk around the global macro environment, and company-specific execution questions. The discipline to remain invested — consistent with a Buffett-style time horizon — would have been required to realize the full 41.55% total return illustrated here.
Looking ahead, the key variables that are likely to matter over the next five years include the trajectory of global trade volumes, the durability of e-commerce demand, the company’s ability to execute on cost-efficiency programs, and ongoing capital-allocation decisions across dividends, buybacks, and reinvestment in the network. For investors applying a similar five-year lens today, these are central considerations when assessing whether FedEx fits within a diversified, long-term equity portfolio.
One more piece of investment wisdom to leave you with:
“You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets.” — Peter Lynch
In other words, periods of volatility and temporary price weakness are a feature, not a bug, of equity investing. The FedEx example underscores how staying invested through such phases, while reinvesting dividends, can still produce respectable long-term outcomes for patient shareholders.
