“I buy on the assumption that they could close the market the next day and not reopen it for five years.”
— Warren Buffett
This oft-cited Warren Buffett observation highlights the importance of time horizon in equity investing. When evaluating any prospective purchase, a disciplined investor must ask: could I reasonably hold this business for many years, potentially through an entire five-year cycle of changing market conditions?
For long-term, buy-and-hold investors, what matters most is not the inevitable interim volatility, but the cumulative return generated over the full holding period. With that in mind, consider an investor who, five years ago in 2021, committed $10,000 to shares of TKO Group Holdings Inc (the combined combat sports and entertainment company that now houses the Ultimate Fighting Championship and World Wrestling Entertainment) under the ticker NYSE: TKO. The question at the time: what might that capital look like after five years of patient ownership, with dividends systematically reinvested?
Below is a snapshot of how that hypothetical investment would have performed.
| Start date: | 03/17/2021 |
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| End date: | 03/16/2026 | ||||
| Start price/share: | $56.57 | ||||
| End price/share: | $199.77 | ||||
| Starting shares: | 176.77 | ||||
| Ending shares: | 190.92 | ||||
| Dividends reinvested/share: | $8.02 | ||||
| Total return: | 281.40% | ||||
| Average annual return: | 30.70% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $38,139.76 | ||||
As shown above, the five-year investment result worked out exceptionally well, with an annualized rate of return of 30.70%. A $10,000 investment made five years ago would have grown to $38,139.76 as of 03/16/2026, assuming dividends were fully reinvested. On a total return basis, that represents a gain of 281.40%. For investors thinking in terms of multi-year compounding rather than single-quarter headlines, this is a powerful illustration of what a sustained period of strong underlying performance can deliver — and naturally invites the question: how might TKO shares perform over the next five years?
It is important to note that these figures are based on a historical backtest and do not guarantee future results. The calculations reflect a buy-and-hold strategy over the stated period, exclusive of any trading commissions or taxes that individual investors may face. [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Always an important consideration with a dividend-paying company is whether to reinvest dividends or take them in cash. Over the past five years, TKO Group Holdings Inc has paid $8.02 per share in dividends. In the above analysis, the assumption is that the investor automatically reinvests each dividend payment into additional shares of stock. For purposes of the calculator, the reinvestment takes place at the closing price on the ex-dividend date for each distribution.
This disciplined reinvestment approach is what led the share count in the example to increase from 176.77 shares at the outset to 190.92 shares by the end of the measurement period. Even if price appreciation does much of the heavy lifting, the incremental shares accumulated via reinvested dividends contribute meaningfully to the final portfolio value over time. This combination of capital gains and growing share count is at the heart of total-return oriented dividend investing.
Based upon the most recent annualized dividend rate of $3.12 per share, we calculate that TKO has a current yield of approximately 1.56% on the ending share price of $199.77. Another useful datapoint is “yield on cost” — that is, the current annualized dividend expressed as a percentage of the investor’s original purchase price. Using the initial $56.57 per share entry point, the $3.12 dividend equates to a yield on cost of 2.76%.
While a 1.56% current yield would not qualify TKO as a high-yield equity, investors who bought earlier in the company’s trajectory and have benefited from both dividend growth and share price appreciation now effectively own an asset that is generating a significantly higher cash return on their original capital at risk. Over longer horizons, continued dividend increases — if supported by cash flows and capital allocation priorities — can drive yield on cost materially higher, even when the headline yield appears modest to new buyers.
TKO’s business profile helps explain why total return, rather than yield alone, has been the primary driver of value. The company operates a portfolio of premium combat sports and sports entertainment properties with global fanbases, monetized through live events, media rights, sponsorships, and consumer products. Industry tailwinds have included the continued shift toward live sports as must-have content for streaming platforms and broadcasters, as well as the growing monetization of international audiences. These dynamics have historically supported revenue growth, margin expansion, and, by extension, the capacity to return capital to shareholders through both dividends and, at times, share repurchases.
Of course, a backward-looking analysis is not a substitute for forward-looking due diligence. Investors assessing TKO today must weigh factors such as the durability of media rights economics, the competitive landscape within global sports and entertainment, regulatory and reputational risks associated with combat sports, and the company’s leverage and capital allocation framework following major corporate transactions. Valuation also matters: the return profile for new investors will depend heavily on the entry multiple relative to TKO’s underlying earnings power and growth prospects.
Nonetheless, the five-year track record outlined here underscores several enduring lessons. First, staying invested through market noise can be rewarding when the underlying business continues to execute. Second, the compounding effect of reinvested dividends, even when nominal yields are modest, is a quietly powerful contributor to long-run returns. Finally, anchoring one’s expectations around a multi-year horizon — in line with Buffett’s suggestion about markets being closed for five years — can help investors focus more intently on business fundamentals rather than short-term price swings.
One more investment quote to leave you with:
“I rarely think the market is right. I believe non-dividend stocks aren’t much more than baseball cards. They are worth what you can convince someone to pay for it.” — Mark Cuban
While some market participants may disagree with Cuban’s characterization of non-dividend payers, his remark underscores a key point for income-oriented investors: a recurring cash distribution, underpinned by sustainable free cash flow, can provide a tangible anchor of value in addition to whatever price the market is willing to assign to a stock at any given moment.
