“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 long enough to test whether a stock can deliver through a full business cycle, including changes in demand, valuation, and capital allocation. For NASD: SWKS, the results over the past five years were weak. A $10,000 investment in Skyworks Solutions Inc made on 06/16/2021 would have declined substantially by 06/15/2026, even after assuming all dividends were reinvested.
SWKS 5-Year Return Details
| Start date: | 06/16/2021 |
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| End date: | 06/15/2026 | ||||
| Start price/share: | $170.98 | ||||
| End price/share: | $76.26 | ||||
| Starting shares: | 58.49 | ||||
| Ending shares: | 67.49 | ||||
| Dividends reinvested/share: | $13.08 | ||||
| Total return: | -48.53% | ||||
| Average annual return: | -12.44% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $5,146.70 | ||||
The headline result is straightforward: Skyworks Solutions delivered a negative five-year total return of 48.53%, equivalent to an annualized return of -12.44%. In dollar terms, a $10,000 investment fell to $5,146.70 over the period ending 06/15/2026. These figures include dividend reinvestment, which means the loss reflects both the decline in the stock price and the partial offset provided by cash distributions. [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
What Drove the Weak Return?
The main driver was price compression. Skyworks Solutions shares declined from $170.98 to $76.26 over the holding period, a drop large enough to overwhelm the benefit of reinvested dividends. Even though the investor’s share count increased from 58.49 to 67.49 through dividend reinvestment, the lower ending share price left the total position value well below the initial investment.
This is a useful reminder that dividend-paying stocks are not insulated from capital losses. Total return depends on three moving parts:
- the starting valuation paid for the shares,
- the company’s underlying operating performance over time, and
- the cash income generated and reinvested along the way.
When a stock experiences a significant re-rating or sustained earnings pressure, dividend income may soften the decline, but it often cannot fully offset it.
How Dividend Reinvestment Affected the Outcome
Over the five years in this analysis, Skyworks Solutions paid $13.08 per share in dividends, and those dividends were assumed to be reinvested on each ex-dividend date. That raised the share count by roughly 15%, from 58.49 shares to 67.49 shares.
In practical terms, reinvestment improved the final result relative to a price-only calculation. However, the stock’s decline was steep enough that the additional shares did not prevent a materially negative overall return. This distinction matters because total return, not price return alone, is the appropriate framework for evaluating long-term equity performance.
Current Yield and Yield on Cost
Based on the most recent annualized dividend rate of $2.84 per share, SWKS has a current yield of approximately 3.72% using the ending share price of $76.26. A separate measure, yield on cost, compares that same annualized dividend to the original purchase price of $170.98. On that basis, the yield on cost is about 2.18%.
These two yield measures answer different questions:
- Current yield shows the income return available at the stock’s present market price.
- Yield on cost shows the income generated relative to the original entry price.
Yield on cost can be a helpful historical reference, but current yield is generally more relevant when evaluating the stock as it stands today.
Key Takeaways From the SWKS 5-Year Return
For quick reference, the five-year Skyworks Solutions investment result can be summarized as follows:
- A $10,000 investment declined to $5,146.70.
- Total return was -48.53% with dividends reinvested.
- Annualized return was -12.44%.
- Dividend reinvestment increased the share count, but not enough to offset the stock’s price decline.
- The ending dividend yield was higher than the original yield on cost because the share price fell materially.
For long-term holders, this period shows how a semiconductor stock can produce a disappointing investment outcome even while continuing to pay dividends. The lesson is not that dividends lack value, but that entry price, earnings durability, and cyclical exposure remain central to long-horizon returns.
More investment wisdom to ponder:
“Taking risks is really the only way to consistently achieve above-average returns.” — Sam Zell
