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“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

— Warren Buffett

The above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a decade-long period?

Today, let’s look backwards in time to 2009, and take a look at what happened to investors who asked that very question about Teleflex Incorporated (NYSE: TFX), by taking a look at the investment outcome over a decade-long holding period.

Start date: 06/08/2009
$10,000

06/08/2009
$76,969

06/06/2019
End date: 06/06/2019
Start price/share: $45.35
End price/share: $301.76
Starting shares: 220.51
Ending shares: 255.14
Dividends reinvested/share: $13.60
Total return: 669.91%
Average annual return: 22.64%
Starting investment: $10,000.00
Ending investment: $76,969.99

The above analysis shows the decade-long investment result worked out exceptionally well, with an annualized rate of return of 22.64%. This would have turned a $10K investment made 10 years ago into $76,969.99 today (as of 06/06/2019). On a total return basis, that’s a result of 669.91% (something to think about: how might TFX shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Teleflex Incorporated paid investors a total of $13.60/share in dividends over the 10 holding period, marking a second component of the total return beyond share price change alone. Much like watering a tree, reinvesting dividends can help an investment to grow over time — for the above calculations we assume dividend reinvestment (and for this exercise the closing price on ex-date is used for the reinvestment of a given dividend).

Based upon the most recent annualized dividend rate of 1.36/share, we calculate that TFX has a current yield of approximately 0.45%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.36 against the original $45.35/share purchase price. This works out to a yield on cost of 0.99%.

One more investment quote to leave you with:
“If you can follow only one bit of data, follow the earnings.” — Peter Lynch