“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 two-decade holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Roper Technologies Inc (NASD: ROP)? Today, we examine the outcome of a two-decade investment into the stock back in 2005.
| Start date: | 11/17/2005 |
|
|||
| End date: | 11/14/2025 | ||||
| Start price/share: | $38.44 | ||||
| End price/share: | $449.50 | ||||
| Starting shares: | 260.15 | ||||
| Ending shares: | 292.38 | ||||
| Dividends reinvested/share: | $26.87 | ||||
| Total return: | 1,214.27% | ||||
| Average annual return: | 13.74% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $131,392.58 | ||||
As shown above, the two-decade investment result worked out quite well, with an annualized rate of return of 13.74%. This would have turned a $10K investment made 20 years ago into $131,392.58 today (as of 11/14/2025). On a total return basis, that’s a result of 1,214.27% (something to think about: how might ROP shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Roper Technologies Inc paid investors a total of $26.87/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 3.64/share, we calculate that ROP has a current yield of approximately 0.81%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 3.64 against the original $38.44/share purchase price. This works out to a yield on cost of 2.11%.
One more investment quote to leave you with:
“Searching for companies is like looking for grubs under rocks: if you turn over 10 rocks you’ll likely find one grub; if you turn over 20 rocks you’ll find two.” — Peter Lynch
