“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
A key lesson we can learn from Warren Buffett is how to think about a potential stock investment in the context of a long‑term time horizon. Every investor in a stock has a choice: bite our fingernails over the short‑term ups and downs that are inevitable in the equity markets, or focus on businesses we are comfortable simply buying and holding for the long haul — perhaps even with a deliberate ten‑year holding period in mind.
Investors can even choose to completely ignore the stock market’s short‑run quotations and instead go into their initial investment planning to hold on for years regardless of the price fluctuations that might occur along the way. That mindset is particularly relevant for cyclical sectors such as energy, where commodity price swings can obscure the underlying long‑term economics of a business.
Against that backdrop, we examine what would have happened over a ten‑year holding period had you decided back in 2016 to buy shares of Devon Energy Corp. (NYSE: DVN) and simply hold through to today.
| Start date: | 03/17/2016 |
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| End date: | 03/16/2026 | ||||
| Start price/share: | $27.40 | ||||
| End price/share: | $46.65 | ||||
| Starting shares: | 364.96 | ||||
| Ending shares: | 523.17 | ||||
| Dividends reinvested/share: | $14.41 | ||||
| Total return: | 144.06% | ||||
| Average annual return: | 9.33% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $24,406.17 | ||||
The above analysis shows that the ten‑year investment result worked out well, with an annualized rate of return of 9.33%. That would have turned a $10,000 investment made ten years ago into $24,406.17 today (as of 03/16/2026). On a total return basis, that is a gain of 144.06%.
For context, over roughly the same period the broad U.S. equity market delivered strong mid‑single to low‑double‑digit annualized returns depending on the index and exact start and end dates. Devon’s 9.33% compound annual growth rate therefore placed it in broadly competitive territory versus large‑cap equities, despite operating in a highly cyclical commodity‑exposed industry.
Of the ending value, part came from share price appreciation — the stock rose from $27.40 to $46.65 per share — and part came from the power of reinvested dividends, which increased the share count from 364.96 to 523.17 shares over the period.
That naturally prompts a forward‑looking question for investors: how might DVN shares perform over the next ten years, given the company’s current balance sheet, capital allocation policies, and the evolving landscape for global energy demand and decarbonization? While the answer is unknowable in advance, the historical data provide a concrete illustration of what a disciplined buy‑and‑hold approach has delivered through one full energy cycle that encompassed a severe commodity downturn, a global pandemic shock, and the subsequent recovery.
The ten‑year holding period for Devon also spanned a number of important corporate developments. The company completed a transformative all‑stock merger with WPX Energy in 2021, creating a larger, more diversified U.S. onshore producer with a meaningful footprint in the Permian Basin and other key shale plays. In parallel, management shifted to a shareholder‑return framework emphasizing disciplined capital spending, balance sheet repair, and a mix of base and variable dividends alongside opportunistic share repurchases.
These strategic moves, together with a more conservative approach to production growth, have contributed to Devon’s ability to generate and return cash to shareholders over the last several years, although the absolute level of those returns has still been heavily influenced by prevailing crude oil and natural gas prices.
It is also worth noting that the period between 2016 and 2026 captured extreme volatility in energy markets. Oil prices fell sharply in 2020 as the COVID‑19 pandemic curtailed demand, briefly turning U.S. benchmark futures negative on an intraday basis. Subsequent years saw a robust rebound in demand and prices, assisted by tighter supply and geopolitical disruptions. Long‑term holders in Devon had to tolerate pronounced drawdowns at times, underscoring the behavioral challenge Buffett often alludes to when advocating for a decade‑long investment horizon.
Notice that Devon Energy Corp. paid investors a total of $14.41 per share in dividends over the ten‑year holding period, marking a second component of total return beyond share price change alone. Much like watering a tree, reinvesting dividends can help an investment grow over time — for the above calculations we assume dividend reinvestment, and for this exercise the closing price on the ex‑dividend date is used for the reinvestment of a given dividend.
Reinvestment has a compounding effect. As each dividend payment is used to purchase additional shares, those incremental shares in turn become entitled to future dividend payments. Over a decade, this recursive process can make a material difference in ending wealth, particularly during periods when the stock trades at attractive valuations and dividends can acquire more shares per dollar.
Based upon the most recent annualized dividend rate of $0.96 per share, we calculate that DVN has a current yield of approximately 2.06%. Another interesting data point we can examine is the “yield on cost” — in other words, we can express the current annualized dividend of $0.96 against the original $27.40 per share purchase price. This works out to a yield on cost of 7.52%.
Yield on cost is not a measure of prospective return, but it does illustrate how a rising dividend stream can change the character of an investment over time. For an investor who committed capital in 2016, the income they are now receiving annually from Devon, relative to their original outlay, is meaningfully higher than the headline dividend yield an investor would see quoted today.
Devon’s dividend framework has also evolved. In addition to its base dividend, the company has in recent years implemented a variable dividend component that distributes a portion of excess free cash flow directly to shareholders when commodity prices and operating performance allow. That policy can cause the total dividend to fluctuate from year to year, but it aligns shareholder payouts more closely with the underlying economics of the business and management’s commitment to capital discipline.
There are important caveats investors should keep in mind. The 144.06% total return cited above assumes dividends are reinvested with no taxes, commissions, or slippage, and that fractional shares can be purchased. Individual investor outcomes will vary depending on tax status, transaction costs, and whether dividends are taken in cash or reinvested. Moreover, returns in a commodity producer such as Devon are inherently sensitive to future oil and gas prices, regulatory developments, and the pace of the global energy transition.
Still, the historical record underscores that a patient, long‑term shareholder in Devon over the past decade has been rewarded with positive real wealth creation, provided they were willing to live through episodes of significant volatility and occasional drawdowns.
More investment wisdom to ponder:
“A market downturn doesn’t bother us. It is an opportunity to increase our ownership of great companies with great management at good prices.” — Warren Buffett
For investors evaluating Devon today, the same principles apply. A careful assessment of balance sheet strength, capital allocation, asset quality, and management discipline — coupled with a realistic view of the commodity cycle and the role of hydrocarbons in the global energy mix over the coming decade — is more important than attempting to trade around short‑term price movements.
Ultimately, the ten‑year outcome reviewed here is a practical illustration of Buffett’s admonition to think like a business owner rather than a stock trader. The decision to commit capital for a full decade, despite a volatile backdrop, transformed a single $10,000 allocation into a significantly larger equity stake and a rising income stream — a pattern long‑term investors in cyclical sectors aim to replicate, while recognizing that future returns will depend on variables that cannot be precisely forecast.
