“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 can be a useful test of whether a stock has delivered value through both market fluctuations and income generation. For FirstEnergy Corp (NYSE: FE), the results over the past five years show how total return for a regulated utility can be shaped not only by share-price appreciation, but also by the steady contribution of reinvested dividends.
Using a starting date of 08/11/2021 and an ending date of 08/10/2026, a hypothetical $10,000 investment in FirstEnergy would have grown to $15,015.79, assuming all dividends were reinvested. That equates to a total return of 50.16% and an average annual return of 8.47%.
FirstEnergy 5-Year Return Summary
| Start date: | 08/11/2021 |
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| End date: | 08/10/2026 | ||||
| Start price/share: | $38.16 | ||||
| End price/share: | $46.76 | ||||
| Starting shares: | 262.05 | ||||
| Ending shares: | 321.12 | ||||
| Dividends reinvested/share: | $8.35 | ||||
| Total return: | 50.16% | ||||
| Average annual return: | 8.47% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $15,015.79 | ||||
Put simply, FirstEnergy produced a positive five-year total return, turning $10,000 into just over $15,000. The annualized return of 8.47% is notable because it reflects compounding over a period that includes changes in both interest-rate expectations and utility-sector valuations. The figures above were computed using the Dividend Channel DRIP Returns Calculator.
How Dividends Shaped the Return
For utility stocks such as FirstEnergy, dividends are often a large part of the investment case. Over the five-year period examined here, shareholders received $8.35 per share in dividends, with the calculation assuming those cash payments were reinvested into additional shares on each ex-dividend date using the closing price.
That reinvestment assumption matters. The original $10,000 purchase would have bought 262.05 shares at $38.16 per share. By the end of the period, the share count would have grown to 321.12 shares. In other words, a meaningful portion of the ending value came from owning more shares over time, not just from the stock rising from $38.16 to $46.76.
This distinction is important when evaluating dividend-paying equities:
- Price return measures only the change in the stock price.
- Total return includes dividends received.
- Reinvested total return adds the compounding effect of using those dividends to buy more shares.
Current Yield and Yield on Cost
Based on the most recent annualized dividend rate of $1.86 per share, FE has a current yield of approximately 3.98%, using the ending share price of $46.76.
Another useful measure is yield on cost, which compares the current annualized dividend to the original purchase price. Using the $1.86 dividend rate and the initial cost basis of $38.16 per share, the yield on cost works out to 4.87%.
Yield on cost does not indicate what a new buyer would earn at today’s price, but it does illustrate how a rising or sustained dividend can improve the income profile of a long-held position. For income-oriented holdings, that can be a meaningful part of long-term return.
What the 5-Year Result Says About FirstEnergy Stock
The five-year outcome highlights the characteristics that often define utility-stock returns. Capital appreciation was positive, but not the sole driver. Dividend income and reinvestment played a central role, which is typical for companies in regulated electricity distribution and transmission, where earnings growth tends to be steadier than in more cyclical industries.
That also means future returns may depend less on rapid multiple expansion and more on a combination of dividend policy, capital investment execution, regulatory outcomes, and the company’s ability to grow earnings within its service territories. For long-term shareholders, total return in a utility name is often cumulative rather than dramatic.
One final investment principle remains relevant:
“A lot of people with high IQs are terrible investors because they’ve got terrible temperaments. You need to keep raw, irrational emotion under control.” — Charlie Munger
