“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
Investors can learn a lot from Warren Buffett, whose above quote teaches the importance of thinking about investment time horizon, and asking ourselves before buying any given stock: can we envision holding onto it for years — even a decade-long holding period possibly?
Suppose a “buy-and-hold” investor was considering an investment into Philip Morris International Inc (NYSE: PM) back in 2015: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full decade-long investment time horizon and then actually held for these past 10 years, here’s how that investment would have turned out.
| Start date: | 08/21/2015 |
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| End date: | 08/20/2025 | ||||
| Start price/share: | $80.98 | ||||
| End price/share: | $172.85 | ||||
| Starting shares: | 123.49 | ||||
| Ending shares: | 204.97 | ||||
| Dividends reinvested/share: | $47.31 | ||||
| Total return: | 254.28% | ||||
| Average annual return: | 13.48% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $35,440.04 | ||||
The above analysis shows the decade-long investment result worked out quite well, with an annualized rate of return of 13.48%. This would have turned a $10K investment made 10 years ago into $35,440.04 today (as of 08/20/2025). On a total return basis, that’s a result of 254.28% (something to think about: how might PM shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Philip Morris International Inc paid investors a total of $47.31/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 5.4/share, we calculate that PM has a current yield of approximately 3.12%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 5.4 against the original $80.98/share purchase price. This works out to a yield on cost of 3.85%.
Here’s one more great investment quote before you go:
“Money is better than poverty, if only for financial reasons.” — Woody Allen
