“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 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 Devon Energy Corp. (NYSE: DVN)? Today, we examine the outcome of a twenty year investment into the stock back in 2005.
| Start date: | 10/07/2005 |
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| End date: | 10/06/2025 | ||||
| Start price/share: | $63.40 | ||||
| End price/share: | $34.91 | ||||
| Starting shares: | 157.73 | ||||
| Ending shares: | 253.84 | ||||
| Dividends reinvested/share: | $21.57 | ||||
| Total return: | -11.38% | ||||
| Average annual return: | -0.60% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $8,865.41 | ||||
As we can see, the twenty year investment result worked out poorly, with an annualized rate of return of -0.60%. This would have turned a $10K investment made 20 years ago into $8,865.41 today (as of 10/06/2025). On a total return basis, that’s a result of -11.38% (something to think about: how might DVN shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Devon Energy Corp. paid investors a total of $21.57/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 .96/share, we calculate that DVN has a current yield of approximately 2.75%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .96 against the original $63.40/share purchase price. This works out to a yield on cost of 4.34%.
More investment wisdom to ponder:
“Taking risks is really the only way to consistently achieve above-average returns.” — Sam Zell
