“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a two-decade holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Expeditors International of Washington, Inc. (NYSE: EXPD)? Today, we examine the outcome of a two-decade investment into the stock back in 2005.
| Start date: | 02/28/2005 |
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| End date: | 02/26/2025 | ||||
| Start price/share: | $27.74 | ||||
| End price/share: | $117.40 | ||||
| Starting shares: | 360.49 | ||||
| Ending shares: | 452.69 | ||||
| Dividends reinvested/share: | $14.69 | ||||
| Total return: | 431.46% | ||||
| Average annual return: | 8.71% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $53,172.62 | ||||
As we can see, the two-decade investment result worked out well, with an annualized rate of return of 8.71%. This would have turned a $10K investment made 20 years ago into $53,172.62 today (as of 02/26/2025). On a total return basis, that’s a result of 431.46% (something to think about: how might EXPD shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Expeditors International of Washington, Inc. paid investors a total of $14.69/share in dividends over the 20 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 1.46/share, we calculate that EXPD has a current yield of approximately 1.24%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.46 against the original $27.74/share purchase price. This works out to a yield on cost of 4.47%.
One more investment quote to leave you with:
“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” — Charlie Munger
