“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 provides a useful test of how a dividend-paying consumer staples stock performs through changing market conditions. For investors looking at J.M. Smucker Co. (NYSE: SJM), the key question is straightforward: what is a 2021 investment in SJM worth today after accounting for both share-price movement and reinvested dividends?
Using total return data that assumes dividends were reinvested, a $10,000 investment in SJM made on 07/23/2021 would have grown to $10,741.04 as of 07/22/2026. That equates to a total return of 7.42% and an annualized return of 1.44%.
SJM 5-Year Return Details
| Start date: | 07/23/2021 |
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| End date: | 07/22/2026 | ||||
| Start price/share: | $130.50 | ||||
| End price/share: | $118.05 | ||||
| Starting shares: | 76.63 | ||||
| Ending shares: | 90.99 | ||||
| Dividends reinvested/share: | $21.00 | ||||
| Total return: | 7.42% | ||||
| Average annual return: | 1.44% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $10,741.04 | ||||
In dollar terms, the result is modest: the initial $10,000 investment increased by $741.04 over five years. The more important point is how that return was generated. SJM’s share price declined from $130.50 to $118.05 over the period, so the investment outcome depended heavily on dividends and dividend reinvestment rather than capital appreciation.
What Drove the Total Return?
The return profile highlights a common feature of mature consumer staples companies: a meaningful portion of long-term shareholder return can come from cash distributions instead of multiple expansion or rapid earnings growth. In SJM’s case, investors received $21.00 per share in dividends over the holding period, and reinvesting those payments increased the share count from 76.63 shares to 90.99 shares.
That increase in share count helped offset the decline in the stock price. Without reinvestment, the end value would have been more sensitive to the lower ending share price. With reinvestment, each dividend payment purchased additional shares, which then became eligible for future dividends as well. Over time, that compounding effect can materially shape outcomes, particularly for slower-growth businesses.
A Quick Breakdown of the SJM Investment Result
- Initial investment: $10,000.00
- Ending value: $10,741.04
- Total return: 7.42%
- Annualized return: 1.44%
- Share price change: negative over the period
- Primary support for total return: dividends and reinvestment
Dividend Yield and Yield on Cost
Based on the most recent annualized dividend rate of $4.48 per share, SJM has a current yield of approximately 3.79% using the ending share price of $118.05. Another useful measure is yield on cost, which compares the current annualized dividend to the original purchase price rather than the current market price.
Using the original entry price of $130.50 per share, the current annualized dividend implies a yield on cost of 2.90%. This metric does not measure total return, but it can help illustrate how the income stream from a stock evolves relative to the investor’s original capital outlay.
What the Five-Year SJM Return Suggests
The five-year SJM result underscores the distinction between a stock that produces income and one that delivers strong total-return compounding. A positive total return was achieved, but the annualized gain of 1.44% indicates limited overall growth in shareholder value during this period. For a company in a defensive sector, that may reflect a combination of steady dividends, a relatively stable business model, and a market valuation that did not expand.
This kind of outcome is not unusual for established packaged food companies. Brand strength, recurring demand, and cash generation can support dividends, but revenue growth is often moderate, and returns can be constrained when earnings growth or valuation improvement is limited. As a result, the investment case frequently rests on a blend of defensiveness, income, and capital preservation rather than high growth.
[These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
“October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” — Mark Twain
