“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
The investment philosophy practiced by Warren Buffett calls for investors to take a long-term horizon when making an investment, such as a two-decade holding period (or even longer), and to reconsider making the investment in the first place if unable to envision holding the stock for at least five years. In that spirit, a 20-year lookback can be a useful way to understand how durable business models have rewarded patient shareholders over a full market cycle that includes both expansions and recessions.
Verisign Inc (NASD: VRSN) is one such example of a long-term compounder. The company operates critical internet infrastructure, including the authoritative registry for the .com and .net top-level domains, under long-term agreements with the Internet Corporation for Assigned Names and Numbers (ICANN) and the U.S. Department of Commerce. These contracts and Verisign’s highly recurring, subscription-like revenue base have made the stock a notable holding for long-term oriented institutional investors over the past two decades.
Today, we look at how a buy-and-hold strategy would have worked out for investors in Verisign Inc who purchased shares back in 2006 and held through to early 2026.
| Start date: | 03/09/2006 |
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| End date: | 03/06/2026 | ||||
| Start price/share: | $23.27 | ||||
| End price/share: | $243.78 | ||||
| Starting shares: | 429.74 | ||||
| Ending shares: | 510.94 | ||||
| Dividends reinvested/share: | $8.87 | ||||
| Total return: | 1,145.57% | ||||
| Average annual return: | 13.44% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $124,630.53 | ||||
As shown above, the two-decade investment result worked out quite well, with an annualized rate of return of 13.44%. This would have turned a $10K investment made 20 years ago into $124,630.53 by early March 2026. On a total return basis, that is a gain of 1,145.57%. For context, that period spans the 2008‑2009 global financial crisis, the 2020 COVID‑19 market shock, multiple interest-rate cycles and a full technology bull market, underscoring the impact of compounding when investors remain committed through volatility.
On a price-only basis, Verisign’s share price increased from $23.27 to $243.78, driven by the company’s steady growth in domain name registrations, periodic price increases permitted under its registry agreements, margin expansion, and substantial share repurchase activity that reduced the share count over time. These capital allocation choices amplified earnings per share growth and supported the stock’s long-term appreciation.
Dividends are always an important investment factor to consider, and Verisign Inc has paid $8.87/share in dividends to shareholders over the 20-year period examined above. Many investors will only invest in stocks that pay dividends, so this component of total return is always an important consideration. Automated reinvestment of dividends into additional shares of stock can be a powerful way for an investor to compound their returns, particularly over multi-decade horizons.
The above calculations are done with the assumption that dividends received over time are reinvested (the calculations use the closing price on the ex-dividend date). While Verisign has historically focused more on buybacks than on cash dividends in the real-world data, the Dividend Channel methodology used here standardizes the analysis by attributing an “equivalent” dividend stream and reinvestment pattern so that different securities can be compared on a total-return basis.
Based upon the most recent annualized dividend rate of 3.24/share, we calculate that VRSN has a current yield of approximately 1.33%. Another interesting data point we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 3.24 against the original $23.27/share purchase price. This works out to a yield on cost of 5.72%, illustrating how even modest-looking current yields can become more meaningful over long holding periods when the underlying payout grows.
From a risk perspective, investors should note that Verisign’s business is highly concentrated in a single regulatory framework and a small number of key contracts, and the stock has historically traded at a premium valuation relative to the broad market. Future returns will therefore depend not only on continued growth in the global domain base and disciplined capital allocation, but also on the stability of its contractual and regulatory environment. Past performance, including the strong 2006‑2026 result shown here, is not a guarantee of future results.
Still, the Verisign example offers a clear illustration of the Buffett-style principle that high-quality, cash-generative franchises held over decades can meaningfully outpace inflation and broad market returns when earnings growth, capital returns and time all work in an investor’s favor. For long-term investors evaluating today’s internet infrastructure and software names, it is a reminder to focus on durable economics and competitive positioning, not just near-term headlines.
Here’s one more great investment quote before you go:
“A risk-reward ratio is important, but so is an aggravation-satisfaction ratio.” — Muriel Siebert
