“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— 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 with the stock market, or zero in on stocks we are comfortable to simply buy and hold for the long haul — maybe even a two-decade holding period. In fact, 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 and years regardless of the fluctuations in price that might occur next.
In that spirit, we examine what would have happened over a two-decade holding period had you decided back in 2006 to buy shares of Skyworks Solutions Inc (NASD: SWKS) and simply hold through to today. Skyworks Solutions is a semiconductor company focused on analog and mixed-signal chips that enable wireless connectivity in smartphones, infrastructure, automotive and Internet-of-Things devices. The company has been a key supplier to major handset manufacturers over the past two decades, and its fortunes have been closely tied to secular growth in mobile data and connected devices.
| Start date: | 03/17/2006 |
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| End date: | 03/16/2026 | ||||
| Start price/share: | $5.90 | ||||
| End price/share: | $54.54 | ||||
| Starting shares: | 1,694.92 | ||||
| Ending shares: | 2,145.05 | ||||
| Dividends reinvested/share: | $21.70 | ||||
| Total return: | 1,069.91% | ||||
| Average annual return: | 13.08% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $116,991.63 | ||||
As shown above, the two-decade investment result worked out quite well, with an annualized rate of return of 13.08%. This would have turned a $10K investment made 20 years ago into $116,991.63 today (as of 03/16/2026). On a total return basis, that is a result of 1,069.91%. For context, the long-run annualized total return of the S&P 500 has historically been in the high single digits, so SWKS meaningfully outperformed broad U.S. equities over this period, albeit with higher volatility and meaningful drawdowns along the way.
That performance came despite several challenging market environments over the 20-year span, including the 2008–2009 financial crisis, the 2020 pandemic-driven recession and subsequent semiconductor-cycle swings. Investors who simply held their position and reinvested dividends, rather than attempting to time every market move, were ultimately rewarded.
Beyond share price change, another component of SWKS’s total return these past 20 years has been the payment by Skyworks Solutions Inc of $21.70/share in dividends to shareholders. Although Skyworks did not pay a dividend for much of the 2000s, the company initiated a regular dividend in the mid-2010s and has increased the payout over time as cash flows allowed. Automatic reinvestment of dividends can be a powerful way to compound returns, and for the above calculations we presume that dividends are reinvested into additional shares of stock. (For the purpose of these calculations, the closing price on ex-date is used.)
Based upon the most recent annualized dividend rate of 2.84/share, we calculate that SWKS has a current yield of approximately 5.21%. Another interesting datapoint we can examine is “yield on cost” — in other words, we can express the current annualized dividend of 2.84 against the original $5.90/share purchase price. This works out to a yield on cost of 88.31%. Put differently, an investor who bought in 2006 and held would now be receiving annual dividend income approaching the entirety of the original purchase price every year, assuming the dividend is maintained at that level.
Of course, past performance does not guarantee future results. Skyworks operates in a cyclical and highly competitive industry that is exposed to changes in handset unit volumes, pricing pressure from large customers, and broader macroeconomic conditions. Future returns will depend on factors such as the company’s ability to diversify beyond smartphones, maintain design wins in 5G and future wireless standards, and manage capital allocation between dividends, share repurchases and research and development.
For investors, the SWKS example underscores several broader lessons often emphasized by long-term investors such as Buffett:
- Owning a competitively positioned business through multiple industry cycles can generate attractive long-run compounding, even if interim performance is uneven.
- Dividend initiation and growth, combined with reinvestment, can materially enhance total returns, particularly over multi-decade horizons.
- Patience and a clearly defined time horizon can help investors stay invested during periods of volatility that might otherwise prompt emotionally driven selling.
How SWKS shares perform over the next 20 years will depend on a different set of conditions than those that prevailed from 2006 to 2026, including the evolution of wireless connectivity, artificial intelligence at the edge, and new applications for analog and RF semiconductors. Nonetheless, the historical record illustrates what disciplined, long-term ownership of an individual equity can achieve when the underlying business compounds value over time.
Here’s one more investment quote before you go:
“When you sell in desperation, you always sell cheap.” — Peter Lynch
