“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 provide a more useful lens for evaluating equity returns than short-term price movements. In that context, T-Mobile US Inc (NASD: TMUS) delivered a solid cumulative result for investors who bought shares on 10/07/2021 and held through 10/06/2026, assuming dividends were reinvested.
Over that span, a $10,000 investment in T-Mobile stock grew to $14,157.09. That equates to a total return of 41.59% and an average annual return of 7.20%. The result reflects both share price appreciation and the incremental benefit of reinvesting cash distributions over time.
TMUS 5-Year Return Details
| Start date: | 10/07/2021 |
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| End date: | 10/06/2026 | ||||
| Start price/share: | $123.18 | ||||
| End price/share: | $165.93 | ||||
| Starting shares: | 81.18 | ||||
| Ending shares: | 85.33 | ||||
| Dividends reinvested/share: | $10.20 | ||||
| Total return: | 41.59% | ||||
| Average annual return: | 7.20% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $14,157.09 | ||||
The above figures indicate that the five-year buy-and-hold outcome for TMUS was favorable. A $10,000 position initiated on 10/07/2021 would have grown to $14,157.09 by 10/06/2026, based on dividend reinvestment. [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
What Drove the TMUS Total Return?
T-Mobile’s return over this holding period came from two sources:
- Share price appreciation: the stock rose from $123.18 to $165.93.
- Reinvested dividends: investors received $10.20 per share in cumulative dividends over the period, and those payments increased the ending share count from 81.18 to 85.33.
This distinction matters. Price return captures only the movement in the stock itself, while total return incorporates the compounding effect of cash distributions when they are reinvested. Over multi-year periods, that reinvestment can make a meaningful difference in ending value.
Dividend Yield and Yield on Cost
Based on the most recent annualized dividend rate of $4.68 per share, TMUS has a current dividend yield of approximately 2.82%. Measured against the original purchase price of $123.18 per share, that same annualized payout implies a yield on cost of 2.29%.
Yield on cost is not a valuation metric, but it can be useful for understanding how an income stream has evolved relative to the original entry price. For long-term holders, it provides a simple way to track how a stock’s current dividend compares with the cost basis established years earlier.
Key Takeaways From This 5-Year Holding Period
- Ending value: $14,157.09 from a $10,000 starting investment.
- Total return: 41.59% over five years.
- Annualized return: 7.20%.
- Income contribution: $10.20 per share in reinvested dividends helped lift the final share count.
The broader lesson is that a multi-year framework can reveal a more complete picture of investment outcomes than short-term volatility. For T-Mobile shareholders during this period, the combination of capital appreciation and reinvested dividends produced a respectable total return.
“In the short run, the market is a voting machine but in the long run, it is a weighing machine.” — Benjamin Graham
