“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
The Warren Buffett investment philosophy emphasizes owning “outstanding businesses” for long stretches of time, often across multiple market cycles. A 20-year holding period fits squarely within that long-term approach. How would such a strategy have worked out for an investment in Willis Towers Watson Public Ltd Co (NASD: WTW)? Below, we examine the outcome of a hypothetical two-decade investment made in 2006 and held through early 2026, with dividends reinvested.
| Start date: | 03/13/2006 |
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| End date: | 03/11/2026 | ||||
| Start price/share: | $31.31 | ||||
| End price/share: | $289.90 | ||||
| Starting shares: | 319.39 | ||||
| Ending shares: | 421.81 | ||||
| Dividends reinvested/share: | $42.60 | ||||
| Total return: | 1,122.82% | ||||
| Average annual return: | 13.33% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $122,234.99 | ||||
As shown above, the two-decade investment result worked out quite well, with an annualized rate of return of 13.33%. That performance was delivered across periods that included the 2008‑2009 global financial crisis, the European sovereign debt scare, the COVID‑19 shock in 2020, and repeated interest-rate and macroeconomic regimes.
A $10,000 investment made 20 years ago would have grown into $122,234.99 as of 03/11/2026, assuming dividends were reinvested throughout. On a total return basis, that is a gain of 1,122.82%. Put differently, the original capital would have compounded roughly 12-fold over the period — a practical illustration of the power of long-term compounding in an established, cash-generative financial services business.
Over that span, Willis Towers Watson transformed from a traditional insurance brokerage and risk adviser into a scaled, global professional services firm with significant operations in human capital and benefits consulting, retirement and delegated investment services, and corporate risk and broking. The company also completed major corporate actions, including the 2016 merger of Willis Group with Towers Watson & Co. and the subsequent rebranding as Willis Towers Watson. These strategic moves helped diversify revenue streams and supported earnings growth, which in turn underpinned the share price and dividend profile reflected in the numbers above.
The pattern is consistent with the type of business characteristics long-term investors typically prize: recurring fee income, deep client relationships across insurance and reinsurance markets, and advisory mandates with large multinational corporations. While the stock exhibited periods of volatility, including drawdowns in crises, the long-run outcome illustrates how durable cash flows and steady capital allocation can compound value over time.
(These figures were computed using the Dividend Channel DRIP Returns Calculator, and are based on historical prices and dividend payments over the stated dates.)
The Role of Dividends and Reinvestment
Dividends are always an important investment factor to consider, and Willis Towers Watson Public Ltd Co has paid $42.60/share in dividends to shareholders over the 20-year period examined above. For income-focused investors, this stream of cash payments is a meaningful component of total return. For growth-oriented investors, those same dividends can be an engine of accelerated capital appreciation when reinvested.
Many investors will only invest in stocks that pay dividends, precisely because those distributions can be redeployed — either to fund spending needs or, in the case of automatic dividend reinvestment plans, to purchase additional shares. Automated reinvestment allows investors to acquire more shares when prices are depressed and fewer when prices are elevated, effectively “averaging in” over time while harnessing the power of compounding.
The calculations above assume that dividends received over time are reinvested into additional shares of Willis Towers Watson stock (the calculations use the closing price on ex‑dividend date). This assumption is critical: without reinvestment, the ending share count would be lower, and the final portfolio value materially smaller. Over multi-decade horizons, the incremental returns generated by reinvested dividends often account for a substantial portion of total shareholder wealth creation, particularly in mature, cash-generative businesses.
Current Yield Versus Yield on Cost
Based upon the most recent annualized dividend rate of 3.84/share, we calculate that WTW has a current yield of approximately 1.32%. That level of current yield places the stock in the camp of companies that prioritize a balance between cash returned to shareholders and capital retained for reinvestment, rather than pursuing a high-payout strategy.
Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 3.84 against the original $31.31/share purchase price. This works out to a yield on cost of 4.22%. While yield on cost is not a valuation measure for new buyers, it does highlight the way in which dividend growth, over time, can turn a modest initial yield into a much higher effective income stream on the investor’s original capital.
For long-term shareholders who bought in 2006, the combination of share price appreciation and a rising dividend has delivered both capital growth and an improving underlying income profile. That pattern aligns with the characteristics many institutional and individual investors seek from core holdings in the financial and professional services sector.
Risk, Volatility, and the Long-Term Perspective
It is important to recognize that the 13.33% annualized return shown above was not delivered in a straight line. Over the 20-year horizon, Willis Towers Watson’s share price experienced material drawdowns tied to broader equity market selloffs, changing interest-rate expectations, and sector-specific concerns such as regulatory shifts in insurance markets and the evolving economics of employee benefits.
In that sense, the investment case illustrates a key feature of long-term equity investing: short-term volatility is the price of admission for the potential of long-run compounding. Investors who sold during periods of stress would have realized very different outcomes than those who maintained a patient, Buffett-style holding period.
Past performance never guarantees future results, and Willis Towers Watson’s future returns will depend on factors such as the pace of global economic growth, corporate demand for risk and human capital advisory services, competitive dynamics across brokers and consultants, and management’s capital allocation decisions. Nonetheless, the historical record over the last two decades suggests that ownership of a resilient, fee-based advisory franchise can be rewarding for investors who are willing to look beyond near-term market headlines.
More investment wisdom to ponder:
“Thousands of experts study overbought indicators, head-and-shoulder patterns, put-call ratios, the Fed’s policy on money supply…and they can’t predict markets with any useful consistency, any more than the gizzard squeezers could tell the Roman emperors when the Huns would attack.” — Peter Lynch
For investors considering whether WTW might merit a place as a long-term core holding today, the last 20 years offer a case study in how a combination of steady business fundamentals, disciplined capital allocation, and consistent dividend policy can translate into attractive total returns over time. The more challenging question — and one that requires fresh analysis of valuation, fundamentals, and risk — is how the shares may perform over the next 20 years.
