“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a ten year holding period, or even longer, would fit right into the strategy. Long holding periods can allow the power of compounding, business growth, and dividend reinvestment to work in an investor’s favor, but they also expose investors to full industry cycles and company-specific risks.
How would such a strategy have worked out for an investment into SLB Ltd (formerly Schlumberger Limited, now doing business as SLB; NYSE: SLB)? Today, we examine the outcome of a ten year investment into the stock made back in 2016, assuming dividends were fully reinvested over the period.
| Start date: | 04/13/2016 |
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| End date: | 04/10/2026 | ||||
| Start price/share: | $77.37 | ||||
| End price/share: | $51.92 | ||||
| Starting shares: | 129.25 | ||||
| Ending shares: | 171.59 | ||||
| Dividends reinvested/share: | $13.06 | ||||
| Total return: | -10.91% | ||||
| Average annual return: | -1.15% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $8,908.01 | ||||
As shown above, the ten year investment result worked out poorly, with an annualized rate of return of -1.15%. The ending value of $8,908.01 is below the original $10,000 capital invested, even after including the benefit of dividends reinvested throughout the period. On a total return basis, that is a decline of -10.91%.
By comparison, over the same period U.S. equity benchmarks such as the S&P 500 delivered materially positive annualized returns, helped by a powerful technology-led bull market and a long post-pandemic recovery. The SLB experience underscores that individual stock selection risk can dominate even when an investor adheres to a “buy and hold” discipline.
The ten year window from 2016 to 2026 for SLB spanned a particularly volatile energy cycle. Investors endured:
- the 2016–2017 recovery from the 2014–2015 oil price collapse,
- the 2020 pandemic shock and brief period of negative front-month WTI crude prices, which drove severe cuts in oilfield activity and capital spending, and
- a strong rebound in oil prices and upstream spending from 2021 onward, supported by OPEC+ supply management and recovering global demand.
Against that backdrop, SLB undertook a broad restructuring, reduced costs, streamlined its portfolio, and continued to invest in digital and technology-led service offerings. Despite these efforts and the cyclical rebound, the share price at the end of the measurement period remained significantly below the 2016 starting level, which the dividend stream and reinvestment could not fully offset.
The Role of Dividends in SLB’s Return Profile
Dividends are always an important investment factor to consider, and SLB Ltd has paid $13.06/share in dividends to shareholders over the past 10 years we looked at above. 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. In the case of SLB, reinvested dividends increased the position from 129.25 shares to 171.59 shares by the end of the period, even though the share price finished lower than where it began. Without dividend reinvestment, the ending portfolio value would have been meaningfully lower.
The above calculations are done with the assumption that dividends received over time are reinvested (the calculations use the closing price on ex-date). Investors who elected to take their dividends in cash rather than reinvesting would have experienced a different balance between income and capital value, but the underlying price performance headwind would have remained.
Current Yield and Yield on Cost
Based upon the most recent annualized dividend rate of 1.18/share, we calculate that SLB has a current yield of approximately 2.27%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.18 against the original $77.37/share purchase price. This works out to a yield on cost of 2.93%.
For long-term income-focused shareholders, yield on cost provides a lens on how the income stream has evolved relative to their original outlay. However, it does not substitute for an assessment of total return. Even with a modest improvement in yield on cost, the overall investment here still resulted in a negative ten year total return.
It is also worth noting that SLB, like many energy-related companies, responded to the extreme downturn in 2020 with dividend reductions before later rebuilding its payout. That path illustrates an important risk for investors who rely heavily on dividend income from cyclical sectors: distributions can and do adjust when industry fundamentals deteriorate.
What the Past Decade Suggests for Long Term Investors
Looking back from 2026, the SLB case study highlights several themes that are relevant for investors considering a Buffett-style long holding period:
- Starting valuation matters. Paying a high multiple on peak or near-peak earnings can impair long-term returns, even in high-quality franchises.
- Industry cyclicality can overwhelm time in the market. Energy services is structurally more volatile than the broad market, and that cyclicality showed up clearly in SLB’s ten year journey.
- Dividend reinvestment helps but is not a cure-all. Compounding works best when the underlying business and share price trend are supportive; here it softened, but did not reverse, a negative capital return.
- Diversification remains essential. A concentrated position in a single cyclical stock, even over a full decade, can lag broad equity indices by a wide margin.
None of this pre-judges how SLB shares will perform over the next ten years. The company today positions itself as a technology-led solutions provider across the oil and gas value chain, and it has been expanding offerings in digital, low-carbon technologies, and new energy solutions. Future returns will depend on global energy demand, capital spending patterns, commodity prices, SLB’s execution, and the valuation at which new investors enter.
For investors evaluating SLB or any energy-services name today, the past decade serves as a reminder to weigh cyclical risk, balance sheet strength, capital allocation discipline, and the sustainability of the dividend alongside headline yield.
One more piece of investment wisdom to leave you with:
“When I was young I thought that money was the most important thing in life; now that I am old I know that it is.” — Oscar Wilde
