“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a decade-long holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Blackstone Inc (NYSE: BX)? Today, we examine the outcome of a decade-long investment into the stock back in 2014.
| Start date: | 10/31/2014 |
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| End date: | 10/30/2024 | ||||
| Start price/share: | $30.12 | ||||
| End price/share: | $171.54 | ||||
| Starting shares: | 332.01 | ||||
| Ending shares: | 550.18 | ||||
| Dividends reinvested/share: | $28.41 | ||||
| Total return: | 843.78% | ||||
| Average annual return: | 25.15% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $94,371.84 | ||||
The above analysis shows the decade-long investment result worked out exceptionally well, with an annualized rate of return of 25.15%. This would have turned a $10K investment made 10 years ago into $94,371.84 today (as of 10/30/2024). On a total return basis, that’s a result of 843.78% (something to think about: how might BX shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Blackstone Inc paid investors a total of $28.41/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 3.44/share, we calculate that BX has a current yield of approximately 2.01%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 3.44 against the original $30.12/share purchase price. This works out to a yield on cost of 6.67%.
One more piece of investment wisdom to leave you with:
“The policy of being too cautious is the greatest risk of all.” — Jawaharlal Nehru
