“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 Equifax Inc (NYSE: EFX) produced a negative total return, even after including reinvested dividends. Using a starting date of 09/14/2021 and an ending date of 09/11/2026, a $10,000 investment declined to $6,423.78. That equates to a total return of -35.77% and an annualized return of -8.48%.
The result illustrates an important point about long-term equity ownership: time can smooth temporary volatility, but it does not by itself eliminate valuation risk or business-cycle exposure. For EFX, dividends provided some offset, but not enough to overcome the decline in the share price over the period.
EFX 5-Year Return Details
| Start date: | 09/14/2021 |
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| End date: | 09/11/2026 | ||||
| Start price/share: | $273.86 | ||||
| End price/share: | $169.00 | ||||
| Starting shares: | 36.52 | ||||
| Ending shares: | 38.00 | ||||
| Dividends reinvested/share: | $8.64 | ||||
| Total return: | -35.77% | ||||
| Average annual return: | -8.48% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $6,423.78 | ||||
The share-price decline was the dominant driver of the outcome. EFX fell from $273.86 to $169.00 over the measurement period, a drop of roughly 38%. Reinvested dividends modestly increased the share count from 36.52 to 38.00, which softened the loss but did not change the overall direction of returns.
Stated differently, dividend reinvestment helped preserve capital at the margin, but this was not a case in which income meaningfully offset a weak entry point or multiple compression. For a stock with a relatively modest yield, long-term returns remained closely tied to the underlying share price.
What Happened to a $10,000 Investment in EFX?
Over the five-year holding period:
- $10,000 invested on 09/14/2021 became $6,423.78 on 09/11/2026.
- Total return, including reinvested dividends, was -35.77%.
- Annualized return was -8.48%.
- Total dividends received and reinvested amounted to $8.64 per original share.
These figures were computed with the Dividend Channel DRIP Returns Calculator, using dividend reinvestment assumptions based on the closing price on each ex-dividend date.
The Role of Dividends in EFX Total Return
Equifax paid $8.64 per share in dividends over the period. Because those cash payments were assumed to be reinvested, the investment ended with more shares than it began with. That is the core mechanism behind dividend compounding: distributions buy incremental ownership, which can add to future returns if the stock performs well over time.
In this case, however, the contribution from dividends was limited by the stock’s comparatively low yield. Based on the most recent annualized dividend rate of $2.24 per share and a share price of $169.00, the current yield works out to approximately 1.33%. Measured against the original purchase price of $273.86, the current dividend rate implies a yield on cost of about 0.82%.
Yield on cost can be a useful reference point for long-held positions, but it should not be confused with current market yield or forward return potential. For portfolio decisions made today, the relevant comparison is usually the dividend relative to the current stock price and the company’s broader earnings and cash-flow outlook.
Why a Long Holding Period Does Not Guarantee Strong Returns
A long-term holding period can be advantageous when a business compounds earnings, expands free cash flow, and sustains or grows dividends. It is less forgiving when investors begin from an elevated valuation, when operating performance disappoints, or when a stock’s valuation multiple contracts. Even durable businesses can deliver weak shareholder returns over multiyear periods if the purchase price leaves limited room for error.
That is the central lesson from this EFX example. The buy-and-hold approach reduced trading noise and captured all dividend payments, but investor outcomes were still shaped primarily by the change in the market value of the shares.
Here’s one more investment quote before you go:
“You can’t restate a dividend.” — Malon Wilkus
