“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 a practical test of any buy-and-hold thesis, particularly for a long-established dividend payer such as Genuine Parts Co. (NYSE: GPC). Over the five years from 06/11/2021 through 06/10/2026, GPC produced a negative total return even after including reinvested dividends. The result illustrates an important point in equity income investing: a steady dividend can cushion weakness, but it does not fully offset a meaningful decline in the share price.
GPC 5-Year Return Details
| Start date: | 06/11/2021 |
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| End date: | 06/10/2026 | ||||
| Start price/share: | $129.03 | ||||
| End price/share: | $98.43 | ||||
| Starting shares: | 77.50 | ||||
| Ending shares: | 89.40 | ||||
| Dividends reinvested/share: | $19.26 | ||||
| Total return: | -12.00% | ||||
| Average annual return: | -2.52% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $8,801.92 | ||||
The numbers show that a $10,000 investment in Genuine Parts five years ago would have declined to $8,801.92 by 06/10/2026, assuming dividends were reinvested. That equates to a total return of -12.00% and an average annual return of -2.52%. [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
What Drove The Five-Year Outcome
The primary driver of the weak result was capital depreciation. GPC shares fell from $129.03 to $98.43 over the measurement period, a drop of roughly 23.7% before accounting for dividends. Reinvestment helped offset part of that decline by increasing the share count from 77.50 to 89.40, but the added shares were not enough to overcome the lower ending stock price.
This is a useful example of how total return works in practice:
- Price return was negative, as the stock finished well below the purchase price.
- Dividend income added to return and softened the drawdown.
- Dividend reinvestment increased ownership over time, which supports compounding when prices recover, but does not guarantee a positive outcome over a fixed holding period.
The Role Of Dividends In GPC Total Return
Dividends remained a meaningful component of the investment case. Over the five years measured above, Genuine Parts paid $19.26 per share in dividends. For an investor focused on total return rather than price movement alone, that cash flow matters. It reduced the gap between the starting and ending value and, when reinvested, increased the number of shares owned.
The calculations above assume all dividends were reinvested into additional GPC shares using the closing price on the ex-dividend date. That assumption is important because it captures the compounding effect of automatic reinvestment, which can materially change long-term results compared with simply taking dividends in cash.
Current Yield And Yield On Cost
Based on the most recent annualized dividend rate of $4.25 per share, GPC has a current yield of approximately 4.32% at the ending share price of $98.43. A related metric is yield on cost, which compares the current annualized dividend to the original purchase price. Using the initial price of $129.03, the yield on cost is 3.35%.
These two figures answer different questions:
- Current yield shows the income return available at today’s market price.
- Yield on cost shows how the current dividend stream compares with the original entry price.
Yield on cost can be helpful for understanding how an income stream has evolved over time, but it should not replace an assessment of current valuation, dividend sustainability, or forward return prospects.
Why A Dividend Stock Can Still Produce A Negative Five-Year Return
A dividend-paying stock can post a negative buy-and-hold result when the decline in valuation exceeds the income received. In simple terms, the total return equation is:
Total return = price change + dividends + reinvestment effect
In GPC’s case, the dividend stream was meaningful, but the stock’s lower ending price dominated the outcome. For long-term investors, this underscores why dividend yield alone is not a sufficient basis for stock selection. Business performance, earnings resilience, payout coverage, valuation at purchase, and the durability of competitive position all matter to eventual returns.
More investment wisdom to ponder:
“The idea that a bell rings to signal when to get into or out of the stock market is simply not credible. After nearly fifty years in this business, I don’t know anybody who has done it successfully and consistently.” — Jack Bogle
