“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a twenty year holding period, or even longer, would fit right into the strategy. A buy-and-hold discipline can work well in businesses that consistently compound earnings and dividends over long stretches of time. However, it also exposes investors to the risk that a company’s fundamentals, industry structure, or capital-allocation priorities will change in ways that erode shareholder value.
How would such a strategy have worked out for an investment into Viatris Inc (NASD: VTRS)? Today, we examine the outcome of a twenty year investment into the stock back in 2006, assuming a $10,000 initial investment and full dividend reinvestment.
| Start date: | 04/10/2006 |
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| End date: | 04/08/2026 | ||||
| Start price/share: | $22.72 | ||||
| End price/share: | $13.57 | ||||
| Starting shares: | 440.14 | ||||
| Ending shares: | 551.10 | ||||
| Dividends reinvested/share: | $2.67 | ||||
| Total return: | -25.22% | ||||
| Average annual return: | -1.44% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $7,481.04 | ||||
The above analysis shows the twenty year investment result worked out poorly, with an annualized rate of return of -1.44%. This would have turned a $10K investment made 20 years ago into $7,481.04 today (as of 04/08/2026). On a total return basis, that is a result of -25.22% (something to think about: how might VTRS shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Understanding What Is Behind The Numbers
For context, Viatris Inc in its current form is the product of significant corporate restructuring in the global pharmaceuticals space. Viatris was created through the combination of Mylan N.V. and Pfizer Inc.’s Upjohn business, a transaction that closed in late 2020. As a result, an investor who bought into the predecessor entity two decades ago has effectively experienced:
- Exposure to a large portfolio of generic and off-patent branded medicines.
- Multiple strategic transactions, including acquisitions, divestitures, and the transformational Upjohn combination.
- Periods of elevated leverage as management sought scale, followed by subsequent deleveraging efforts.
- Valuation pressure as investors reassessed long-term earnings power in a competitive generics landscape.
These dynamics help to explain why, over a long period in which the broad U.S. equity market compounded at a mid-to-high single digit annual rate, a passive buy-and-hold position in this particular name delivered a negative real-world outcome even after dividends.
The Role Of Dividends In Total Return
Dividends are always an important investment factor to consider, and Viatris Inc has paid $2.67/share in dividends to shareholders over the past 20 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 over long time frames, particularly in businesses where earnings and cash flows are steadily expanding.
The above calculations are done with the assumption that dividends received over time are reinvested (the calculations use the closing price on ex-date). In this case, reinvesting dividends increased the share count from 440.14 shares at the outset to 551.10 shares after twenty years, cushioning but not reversing the impact of a lower share price over the period.
Based upon the most recent annualized dividend rate of .48/share, we calculate that VTRS has a current yield of approximately 3.54%. Another interesting datapoint we can examine is “yield on cost” — in other words, we can express the current annualized dividend of .48 against the original $22.72/share purchase price. This works out to a yield on cost of 15.58%.
Yield on cost is often cited by long-term investors because it demonstrates how an initial purchase price can look more attractive over time if the dividend grows or remains stable while capital is preserved. However, as this case illustrates, a high yield on cost does not necessarily translate into a favorable overall outcome if the underlying share price trends lower over a multi-decade horizon. In total-return terms, price performance still matters.
Lessons For Long-Term Investors
The VTRS 20-year record underscores several broader points for investors who follow a buy-and-hold approach inspired by Buffett-style thinking:
- Business quality is central. Long holding periods work best in companies with durable competitive advantages, strong balance sheets, and consistent capital allocation discipline. In more cyclical or structurally challenged industries, extended holding periods can lock in subpar returns.
- Industry structure can change. The global generics and off-patent pharmaceuticals market has faced pricing pressure, regulatory shifts, and increased competition. When industry economics compress, even large-scale players can see valuation multiples contract.
- Events matter over 20 years. Large mergers, asset sales, and changes in leverage can reshape a company’s risk profile and growth trajectory. A patient investor still needs to monitor whether the original investment thesis remains intact.
- Dividend income is not a substitute for total-return discipline. A generous dividend can be attractive, but if it is not backed by sustainable free cash flow and reinvestment opportunities, the stock may struggle to keep pace with market benchmarks.
For investors assessing Viatris today, the historical track record is only one input. Forward-looking analysis of pipeline durability, cost-efficiency programs, deleveraging progress, and capital-allocation priorities will be key in determining whether the next twenty years look meaningfully different from the last twenty.
Another great investment quote to think about:
“Behind every stock is a company. Find out what it’s doing.” — Peter Lynch
