“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a ten year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Northrop Grumman Corp (NYSE: NOC)? Today, we examine the outcome of a ten year investment into the stock back in 2015.
| Start date: | 10/22/2015 |
|
|||
| End date: | 10/21/2025 | ||||
| Start price/share: | $179.50 | ||||
| End price/share: | $599.35 | ||||
| Starting shares: | 55.71 | ||||
| Ending shares: | 65.17 | ||||
| Dividends reinvested/share: | $57.15 | ||||
| Total return: | 290.62% | ||||
| Average annual return: | 14.59% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $39,065.31 | ||||
As shown above, the ten year investment result worked out quite well, with an annualized rate of return of 14.59%. This would have turned a $10K investment made 10 years ago into $39,065.31 today (as of 10/21/2025). On a total return basis, that’s a result of 290.62% (something to think about: how might NOC shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Northrop Grumman Corp paid investors a total of $57.15/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 9.24/share, we calculate that NOC has a current yield of approximately 1.54%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 9.24 against the original $179.50/share purchase price. This works out to a yield on cost of 0.86%.
One more investment quote to leave you with:
“Nearly every time I strayed from the herd, I’ve made a lot of money. Wandering away from the action is the way to find the new action.” — Jim Rogers
