“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
One of the most important lessons investors can draw from Warren Buffett is how to think about time horizon when evaluating an equity investment. Immediately after buying shares of a given stock, investors can monitor the position’s value on a day-to-day — and even minute-by-minute — basis. Some days the broader market will be higher, other days lower, and individual securities can be substantially more volatile than the indices. These daily price fluctuations, while attention-grabbing, can easily distract from the long-term compounding potential of a durable business.
In that context, we examine the result of a two-decade holding period for an investor who considered FactSet Research Systems Inc. (NYSE: FDS) back in 2006, purchased the shares, and then simply held on through to today, reinvesting dividends and ignoring interim market noise. FactSet is a global provider of financial data, analytics, and workflow solutions to investment managers, investment banks, and other institutional clients. The company generates recurring subscription-based revenue and has historically emphasized steady organic growth, disciplined acquisitions, and consistent capital returns to shareholders.
| Start date: | 03/10/2006 |
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| End date: | 03/09/2026 | ||||
| Start price/share: | $39.97 | ||||
| End price/share: | $221.04 | ||||
| Starting shares: | 250.19 | ||||
| Ending shares: | 311.30 | ||||
| Dividends reinvested/share: | $42.28 | ||||
| Total return: | 588.10% | ||||
| Average annual return: | 10.12% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $68,812.63 | ||||
As we can see, the two-decade investment result worked out quite well, with an annualized rate of return of 10.12%. This would have turned a $10,000 investment made 20 years ago into $68,812.63 today (as of 03/09/2026). On a total return basis, that is a gain of 588.10%. For context, over roughly similar long periods the S&P 500 has typically produced annualized total returns in the high single digits, implying that FactSet has modestly outpaced broad U.S. equities over this horizon for investors who remained fully invested and reinvested all dividends.
These numbers were computed with the Dividend Channel DRIP Returns Calculator, which assumes dividends are reinvested on each applicable ex-dividend date at the closing market price. Importantly, this analysis does not account for taxes, transaction costs, or individual investor circumstances, all of which can influence realized results.
Always an important consideration with a dividend-paying company is whether to reinvest dividends. Over the past 20 years, FactSet Research Systems Inc. has paid $42.28 per share in dividends. For the above analysis, we assume that the investor reinvests all dividends into new shares of stock; over time, this reinvestment contributed to an increase in share count from 250.19 to 311.30 shares. That additional 61.11 shares reflects the power of dividend compounding in a business that has consistently raised its payout.
Based upon the most recent annualized dividend rate of $4.40 per share, we calculate that FDS has a current yield of approximately 1.99%. Another interesting data point to examine is “yield on cost” — in other words, we can express the current annualized dividend of $4.40 against the original $39.97 per share purchase price. This works out to a yield on cost of 4.98%, meaning the investor is now receiving annual cash income equal to nearly 5% of the original capital committed, before any consideration of price appreciation.
FactSet has also established a track record of consistent dividend increases since initiating its dividend in 1999, placing it in the group of long-standing dividend growers that many income-focused investors monitor. The company has complemented its dividend with share repurchases, which over time have reduced the share count and supported per-share earnings growth. Those factors, combined with recurring subscription revenues and high client retention, have helped underpin the long-run total return profile illustrated above.
Another great investment quote to consider:
“Everyone has the brainpower to make money in stocks. Not everyone has the stomach. If you are susceptible to selling everything in a panic, you ought to avoid stocks and mutual funds altogether.” — Peter Lynch
This 20-year case study in FactSet underscores the practical implications of both quotations. Long-term ownership of a high-quality, cash-generative business, combined with disciplined dividend reinvestment and the willingness to stay invested through periods of volatility — including the 2008‑2009 financial crisis and the 2020 pandemic shock — can meaningfully compound capital over time. Naturally, past performance does not guarantee future results, and future returns will depend on FactSet’s ability to sustain revenue growth, protect margins, and maintain its competitive position in financial data and analytics. Nevertheless, the historical record provides a clear illustration of the potential rewards associated with a long-term, fundamentals-driven approach.
