“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 buy-and-hold investment in TE Connectivity plc (NYSE: TEL) produced a solid total return, combining share-price appreciation with reinvested dividends. Using the period from 05/11/2021 through 05/08/2026, a hypothetical $10,000 investment grew to $16,644.85, illustrating how long-term compounding can work even when dividend yield is not the primary driver of returns.
That result reflects a core principle of buy-and-hold investing: over multi-year periods, business performance, cash generation, capital allocation, and dividend policy often matter more than short-term price swings. In TEL’s case, the investment outcome was supported by both a higher ending share price and the incremental benefit of dividend reinvestment.
TEL 5-Year Return Summary
| Start date: | 05/11/2021 |
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| End date: | 05/08/2026 | ||||
| Start price/share: | $133.79 | ||||
| End price/share: | $206.20 | ||||
| Starting shares: | 74.74 | ||||
| Ending shares: | 80.72 | ||||
| Dividends reinvested/share: | $11.33 | ||||
| Total return: | 66.44% | ||||
| Average annual return: | 10.74% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $16,644.85 | ||||
In practical terms, TEL delivered a 66.44% total return over the five-year holding period, equivalent to an average annual return of 10.74%. A $10,000 initial investment would have increased by $6,644.85 by 05/08/2026. These figures assume dividends were reinvested. [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
What Drove the Return?
TEL’s five-year outcome came from two sources:
- Share-price appreciation: the stock rose from $133.79 to $206.20 per share.
- Dividend reinvestment: investors received a total of $11.33 per share in dividends during the holding period, and reinvesting those payments increased the share count from 74.74 to 80.72.
This distinction matters. Price return shows how the market value of the shares changed, while total return captures the full economic benefit of ownership. For dividend-paying companies, that difference can become increasingly meaningful over time, particularly when cash distributions are systematically reinvested.
How Dividend Reinvestment Changed the Outcome
Dividend reinvestment added incremental compounding to the investment. Rather than taking cash distributions out of the position, the calculation assumes each dividend bought additional shares at the closing price on the ex-dividend date. Those extra shares then participated in future price appreciation and future dividend payments.
That mechanism is visible in the ending share count. The original $10,000 investment purchased 74.74 shares, but reinvestment increased the position to 80.72 shares by the end of the measurement period. For long holding periods, even modest dividend yields can make a measurable contribution to ending value.
Current Yield and Yield on Cost
Based on the most recent annualized dividend rate of $3.12 per share, TEL has a current dividend yield of approximately 1.51%, using the referenced share price. Another useful lens is yield on cost, which compares the current annualized dividend to the original purchase price of $133.79 per share.
On that basis, the yield on cost is about 2.33%. That is distinct from the current market yield: current yield measures income relative to today’s stock price, while yield on cost measures income relative to the investor’s original entry price. For investors focused on dividend growth, yield on cost can help illustrate how rising payouts improve the income profile of a long-held position.
Key Takeaways From TEL’s 5-Year Buy-and-Hold Performance
- TEL turned $10,000 into $16,644.85 over roughly five years.
- The total return was 66.44% with an average annual return of 10.74%.
- Dividends contributed meaningfully, adding both cash return and additional shares through reinvestment.
- The result underscores why total return is the most useful framework for evaluating a long-term equity investment.
For investors assessing TE Connectivity as a long-term holding, the central question is not simply whether the shares rose over the last five years, but how the combination of price appreciation, dividends, and reinvestment shaped the full return profile. On that measure, TEL produced a strong buy-and-hold result over the period examined.
“Investors should purchase stocks like they purchase groceries, not like they purchase perfume.” — Benjamin Graham
