“I buy on the assumption that they could close the market the next day and not reopen it for five years.”
— Warren Buffett
A five-year holding period is often used to test whether a stock has delivered the kind of durable compounding associated with long-term investing. For SBA Communications Corp (NASD: SBAC), that exercise produced a negative outcome over the period beginning in May 2021. Including dividend reinvestment, a $10,000 investment in SBAC declined to $8,239.02 by 05/11/2026, reflecting a total return of -17.63%.
SBAC 5-Year Return at a Glance
| Start date: | 05/12/2021 |
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| End date: | 05/11/2026 | ||||
| Start price/share: | $284.25 | ||||
| End price/share: | $217.26 | ||||
| Starting shares: | 35.18 | ||||
| Ending shares: | 37.92 | ||||
| Dividends reinvested/share: | $17.59 | ||||
| Total return: | -17.63% | ||||
| Average annual return: | -3.80% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $8,239.02 | ||||
The arithmetic is straightforward: the share price fell from $284.25 to $217.26 over the period, and the stock’s dividend stream was not large enough to offset that decline. Even with dividends reinvested, the ending value remained well below the original principal. Put differently, the income component modestly softened the drawdown, but capital depreciation remained the dominant driver of the result.
These figures were computed using the Dividend Channel DRIP Returns Calculator, assuming dividends were reinvested at the closing price on each ex-dividend date.
What the Return Data Shows
SBA Communications is a communications infrastructure company whose business model has historically been tied to recurring leasing revenue from wireless tower assets. That type of asset base can support stable cash generation, but stock performance still depends heavily on valuation, interest-rate sensitivity, growth expectations, and capital allocation. A durable operating model does not guarantee a positive shareholder return over any specific five-year window, especially when the starting valuation is demanding or the market environment shifts.
In this case, the investment outcome highlights an important distinction:
- Business quality and stock return are not the same thing. A company can have resilient assets and recurring revenue while still delivering weak returns if the entry price is too high or sentiment resets.
- Dividend reinvestment helps, but only to a point. Reinvested dividends increased the share count from 35.18 to 37.92, yet that incremental ownership was not enough to overcome the lower ending share price.
- Total return matters more than headline yield. For a moderate-yield stock, price movement typically has a larger effect on five-year outcomes than dividend income alone.
How Dividend Reinvestment Affected the Result
Over the five-year period, SBA Communications paid $17.59 per share in cumulative dividends. Under a dividend reinvestment approach, those cash distributions were used to buy additional shares rather than taken as income. That is why the share count rose from 35.18 to 37.92.
Reinvestment can be powerful when a stock compounds through both price appreciation and dividend growth. When the share price trends lower over a multi-year period, however, the benefit is more limited. The investor ends up owning more shares, but each share is worth less than at the starting point. The final result is therefore a combination of:
- the original purchase price,
- the subsequent market price, and
- the amount of dividend income available for reinvestment.
Current Yield and Yield on Cost
Based on the most recent annualized dividend rate of $5 per share, SBAC has a current yield of approximately 2.30% using the ending share price of $217.26. A separate measure, yield on cost, compares that same annualized dividend to the original purchase price of $284.25. On that basis, the yield on cost is about 1.76%.
These two yield measures answer different questions:
- Current yield shows what the stock pays relative to today’s market price.
- Yield on cost shows what the current dividend represents relative to the investor’s original entry price.
For return analysis, neither measure should be viewed in isolation. A stock can have a respectable current yield while still producing an unsatisfactory total return if the share price weakens materially.
Key Takeaway
A $10,000 investment in SBA Communications made on 05/12/2021 would have fallen to $8,239.02 by 05/11/2026, assuming dividends were reinvested. The five-year total return of -17.63% and average annual return of -3.80% show that dividend income did not offset the decline in the stock price. For long-term investors, SBAC’s five-year record over this period is a reminder that entry valuation and total return discipline matter as much as the stability of the underlying business.
More investment wisdom to ponder:
“The individual investor should act consistently as an investor and not as a speculator.” — Benjamin Graham
