“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— 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 Hartford Insurance Group Inc (NYSE: HIG)? Today, we examine the outcome of a two-decade investment into the stock back in 2005.
| Start date: | 06/13/2005 |
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| End date: | 06/11/2025 | ||||
| Start price/share: | $74.24 | ||||
| End price/share: | $124.37 | ||||
| Starting shares: | 134.70 | ||||
| Ending shares: | 208.04 | ||||
| Dividends reinvested/share: | $22.50 | ||||
| Total return: | 158.75% | ||||
| Average annual return: | 4.87% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $25,893.76 | ||||
The above analysis shows the two-decade investment result worked out as follows, with an annualized rate of return of 4.87%. This would have turned a $10K investment made 20 years ago into $25,893.76 today (as of 06/11/2025). On a total return basis, that’s a result of 158.75% (something to think about: how might HIG shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Hartford Insurance Group Inc paid investors a total of $22.50/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 2.08/share, we calculate that HIG has a current yield of approximately 1.67%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 2.08 against the original $74.24/share purchase price. This works out to a yield on cost of 2.25%.
One more piece of investment wisdom to leave you with:
“Value investing requires a great deal of hard work, unusually strict discipline, and a long-term investment horizon. Few are willing and able to devote sufficient time and effort to become value investors, and only a fraction of those have the proper mind-set to succeed.” — Seth Klarman
