“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 twenty year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Schlumberger Ltd (NYSE: SLB)? Today, we examine the outcome of a twenty year investment into the stock back in 2005.
| Start date: | 08/01/2005 |
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| End date: | 07/30/2025 | ||||
| Start price/share: | $42.36 | ||||
| End price/share: | $34.17 | ||||
| Starting shares: | 236.07 | ||||
| Ending shares: | 357.71 | ||||
| Dividends reinvested/share: | $23.58 | ||||
| Total return: | 22.23% | ||||
| Average annual return: | 1.01% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $12,227.10 | ||||
As we can see, the twenty year investment result worked out as follows, with an annualized rate of return of 1.01%. This would have turned a $10K investment made 20 years ago into $12,227.10 today (as of 07/30/2025). On a total return basis, that’s a result of 22.23% (something to think about: how might SLB shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Schlumberger Ltd paid investors a total of $23.58/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 1.14/share, we calculate that SLB has a current yield of approximately 3.34%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.14 against the original $42.36/share purchase price. This works out to a yield on cost of 7.88%.
Here’s one more great investment quote before you go:
“Markets can remain irrational longer than you can remain solvent.” — John Maynard Keynes
