“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 Moody’s Corp. (NYSE: MCO)? Today, we examine the outcome of a twenty year investment into the stock back in 2006.
| Start date: | 01/13/2006 |
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| End date: | 01/12/2026 | ||||
| Start price/share: | $64.21 | ||||
| End price/share: | $535.12 | ||||
| Starting shares: | 155.74 | ||||
| Ending shares: | 195.54 | ||||
| Dividends reinvested/share: | $30.90 | ||||
| Total return: | 946.38% | ||||
| Average annual return: | 12.45% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $104,652.03 | ||||
The above analysis shows the twenty year investment result worked out quite well, with an annualized rate of return of 12.45%. This would have turned a $10K investment made 20 years ago into $104,652.03 today (as of 01/12/2026). On a total return basis, that’s a result of 946.38% (something to think about: how might MCO shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Moody’s Corp. paid investors a total of $30.90/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 3.76/share, we calculate that MCO has a current yield of approximately 0.70%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 3.76 against the original $64.21/share purchase price. This works out to a yield on cost of 1.09%.
One more piece of investment wisdom to leave you with:
“The four most dangerous words in investing are: ‘this time it’s different.'” — Sir John Templeton
