“I buy on the assumption that they could close the market the next day and not reopen it for five years.”
— Warren Buffett
The investment philosophy practiced by Warren Buffett calls for investors to take a long-term horizon when making an investment, such as a five-year holding period (or even longer), and to reconsider making the investment in the first place if they are unable to envision holding the stock for at least five years. Long-term, fundamentally driven investing remains a powerful framework, but as with any approach, outcomes can vary widely at the individual stock level.
Global Payments Inc (“GPN”, NYSE: GPN) is a useful case study. Global Payments is a leading provider of payments technology and software solutions, serving merchants, issuers, and consumers globally. The company generates revenue primarily from transaction processing fees and value-added software and services across e-commerce, point-of-sale, and integrated payments. The business operates in a structurally growing industry as commerce continues to digitize, yet the stock has experienced substantial multiple compression and volatility in recent years.
Below we examine how a strict buy-and-hold investor would have fared by purchasing GPN in 2021 and holding through to today.
| Start date: | 04/13/2021 |
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| End date: | 04/10/2026 | ||||
| Start price/share: | $213.65 | ||||
| End price/share: | $65.44 | ||||
| Starting shares: | 46.81 | ||||
| Ending shares: | 49.02 | ||||
| Dividends reinvested/share: | $4.95 | ||||
| Total return: | -67.92% | ||||
| Average annual return: | -20.36% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $3,207.73 | ||||
As shown above, the five-year investment result worked out poorly, with an annualized rate of return of -20.36%. This would have turned a $10K investment made five years ago into $3,207.73 today (as of 04/10/2026). On a total return basis, that is a result of -67.92%. For context, over the same period, broad U.S. equity benchmarks such as the S&P 500 delivered strongly positive annualized returns, underscoring the magnitude of GPN’s underperformance.
The path of returns was also volatile. Global Payments shares experienced a sharp derating from their 2021 valuation levels as the market reassessed growth expectations for payments and fintech names, reacted to rising interest rates, and digested company-specific developments. These included integration work following prior large acquisitions, competitive pressures in certain merchant and issuer segments, and a market preference for near-term cash flows over longer-duration growth stories. Despite ongoing revenue growth and continued investment in technology and software capabilities, the stock’s price-to-earnings and price-to-sales multiples compressed meaningfully from their peak.
On a forward-looking basis, investors will need to weigh whether the current valuation more appropriately reflects Global Payments’ risk/reward profile, or whether structural challenges in parts of the payments ecosystem could continue to pressure returns. As always, past performance is not indicative of future results, but periods of significant underperformance can present both opportunities and risks for long-term, fundamentally focused investors.
Dividends are always an important investment factor to consider, and Global Payments Inc has paid $4.95/share in dividends to shareholders over the past five years we looked at above. While GPN is not a high-yield stock and remains primarily a total-return, growth-oriented story, the introduction and gradual growth of its dividend reflect management’s confidence in the stability and visibility of the company’s cash flows. Many an investor will only invest in stocks that pay dividends, so this component of total return is always an important consideration.
Automated reinvestment of dividends into additional shares of stock can be a powerful way for an investor to compound their returns over multi-year holding periods. The above calculations are done with the assumption that dividends received over time are reinvested (the calculations use the closing price on ex-date). This results in share count rising from 46.81 to 49.02 over the five-year horizon, modestly offsetting price declines but not nearly enough to overcome the drawdown in the share price itself.
Based upon the most recent annualized dividend rate of 1/share, we calculate that GPN has a current yield of approximately 1.53%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1 against the original $213.65/share purchase price. This works out to a yield on cost of 0.72%. For income-focused investors, that level of income generation relative to the original entry price is relatively modest and highlights that GPN does not currently function as a core income vehicle.
From a portfolio construction perspective, the 2021‑2026 experience in Global Payments underscores several key lessons for long-term investors:
- Even when the underlying business participates in a secular growth trend such as digital payments, entry valuation and market expectations matter greatly for subsequent returns.
- Buy-and-hold does not mean buy-and-forget; periodic reassessment of fundamentals, capital allocation, and competitive positioning is essential, particularly after large acquisitions or strategy shifts.
- Diversification across sectors, business models, and factor exposures can help mitigate the impact of severe stock-specific drawdowns like the one illustrated here.
- Dividend income can provide a degree of downside cushioning, but in lower-yielding growth names, price performance remains the primary driver of total return.
How might GPN shares perform over the next five years? That will depend on a combination of factors: the pace of global consumer spending and e-commerce growth, the company’s ability to deepen its software and integrated payments footprint, management’s capital allocation decisions (including further deleveraging, buybacks, and dividend policy), and the broader interest-rate and valuation environment for payment and fintech stocks. Investors considering GPN today will want to evaluate not only headline valuation metrics but also competitive dynamics, innovation spending, and the durability of the company’s relationships with merchants, issuers, and technology partners.
Here’s one more great investment quote before you go:
“This company looks cheap, that company looks cheap, but the overall economy could completely screw it up. The key is to wait. Sometimes the hardest thing to do is to do nothing.” — David Tepper
