“I buy on the assumption that they could close the market the next day and not reopen it for five years.”
— Warren Buffett
The wisdom of Warren Buffett reflects a value-based philosophy about investing that says investors are buying shares in a business, and encourages strategic thinking about investment time horizon. Before placing a buy order for a stock, a great question we can ask is whether we would still be comfortable making the investment if we couldn’t sell it for many years?
A “buy-and-hold” approach may call for a time horizon that spans a long period of time — maybe even lasting for a five year holding period. Suppose such a “buy-and-hold” investor had looked into buying shares of Cintas Corporation (NASD: CTAS) back in 2020. Let’s take a look at how such an investment would have worked out for that buy-and-hold investor:
| Start date: | 10/19/2020 |
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| End date: | 10/16/2025 | ||||
| Start price/share: | $85.33 | ||||
| End price/share: | $184.36 | ||||
| Starting shares: | 117.19 | ||||
| Ending shares: | 123.64 | ||||
| Dividends reinvested/share: | $6.71 | ||||
| Total return: | 127.93% | ||||
| Average annual return: | 17.93% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $22,789.20 | ||||
As we can see, the five year investment result worked out exceptionally well, with an annualized rate of return of 17.93%. This would have turned a $10K investment made 5 years ago into $22,789.20 today (as of 10/16/2025). On a total return basis, that’s a result of 127.93% (something to think about: how might CTAS shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Cintas Corporation paid investors a total of $6.71/share in dividends over the 5 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 1.8/share, we calculate that CTAS has a current yield of approximately 0.98%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.8 against the original $85.33/share purchase price. This works out to a yield on cost of 1.15%.
One more investment quote to leave you with:
“Know what you own and why you own it.” — Peter Lynch
