“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
The wisdom of Warren Buffett reflects a value-based philosophy about investing that says investors are buying shares in a business, and encourages strategic thinking about investment time horizon. Before placing a buy order for a stock, a useful question to ask is whether we would still be comfortable making the investment if we could not sell it for many years.
A classic “buy-and-hold” approach often calls for a time horizon that spans a long period of time — maybe even a full decade. Suppose such a buy-and-hold investor had looked into buying shares of Dell Technologies Inc (NYSE: DELL) back in 2016, shortly after the company’s transformational merger with EMC and ahead of its eventual return to public markets in late 2018. The question is how such an investment would have worked out for that patient investor.
The table below presents a hypothetical 10-year performance snapshot for a $10,000 investment in Dell Technologies, assuming dividends are fully reinvested and all corporate actions over the period are reflected in the share price series used by the calculator.
| Start date: | 04/07/2016 |
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| End date: | 04/06/2026 | ||||
| Start price/share: | $7.30 | ||||
| End price/share: | $173.18 | ||||
| Starting shares: | 1,369.86 | ||||
| Ending shares: | 1,506.99 | ||||
| Dividends reinvested/share: | $6.71 | ||||
| Total return: | 2,509.80% | ||||
| Average annual return: | 38.55% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $260,887.50 | ||||
As shown above, the decade-long investment result worked out exceptionally well, with an annualized rate of return of 38.55%. This would have turned a $10,000 investment made 10 years ago into $260,887.50 as of 04/06/2026. On a total return basis, that is a gain of 2,509.80%.
To put that in context, a broad U.S. equity benchmark delivered materially lower returns over the same period. While long-run equity markets have historically generated high-single-digit annualized returns, this Dell Technologies hypothetical illustrates what can happen when a successful business compounds earnings and cash flows from a depressed starting valuation.
How Dividends and Reinvestment Boosted Returns
Many investors refuse to own any stock that lacks a dividend; in the case of Dell Technologies Inc, investors have received $6.71 per share in dividends over the 10-year period examined in the exercise above. That income stream has been relatively recent. Dell initiated a regular quarterly dividend in early 2022, choosing to return a portion of its expanding free cash flow to shareholders after several years focused on debt reduction following the EMC transaction.
This means total return was driven not just by share price appreciation, but also by the dividends received and what the investor did with those dividends. For this exercise, the assumption is that dividends are reinvested — i.e., used to purchase additional shares through a dividend reinvestment plan (DRIP). The calculations use the closing price on the ex-dividend date, which is a common convention in performance analysis.
Because of reinvestment, the investor’s share count rose from 1,369.86 to 1,506.99 over the decade. Those additional 137 shares, acquired without any incremental capital beyond the original $10,000, meaningfully contributed to the ending portfolio value by providing more exposure to Dell’s subsequent share price performance and additional dividends.
Current Yield Versus Yield on Cost
Based upon the most recent annualized dividend rate of $2.52 per share, we calculate that DELL has a current yield of approximately 1.46%. By conventional income-investing standards, that is a modest current yield, particularly when compared with high-yield equities or fixed-income securities.
However, another interesting datapoint is ‘yield on cost’ — that is, expressing the current annualized dividend of $2.52 against the original $7.30 per share purchase price. This works out to a yield on cost of 20.00%. In other words, an investor who bought at the hypothetical 2016 entry price is now receiving annual cash dividends equal to 20% of the original capital laid out, before considering any share-price gains.
While yield on cost is not a forward-looking valuation tool, it does illustrate the power of long-term ownership in a business that both grows and eventually shifts into a capital-return phase, combining share repurchases and dividends.
Business Drivers Behind Dell’s Performance
Several fundamental developments underpinned Dell Technologies’ strong performance over the last decade:
- Transformation and scale: The combination with EMC created one of the world’s largest enterprise IT providers, with leading positions in servers, storage, virtualization and PCs.
- Shift from PC-only to diversified IT solutions: Dell expanded far beyond its legacy PC franchise into data center infrastructure, hybrid cloud and related services, helping smooth out some of the cyclicality historically associated with consumer hardware.
- Balance sheet repair: After taking on substantial leverage to fund the EMC acquisition, Dell embarked on an extended deleveraging program, aided by strong free cash flow and the eventual spin-off of VMware. Lower net debt improved financial flexibility and ultimately supported the introduction and subsequent growth of the dividend.
- Capital allocation discipline: Management has balanced reinvestment in core businesses with share repurchases and dividends, seeking to enhance per-share cash flows and earnings over time.
Investors who purchased shares at a time when the market was skeptical of the PC industry’s prospects, or wary of Dell’s leverage, were effectively paid for bearing that uncertainty as the company executed on its multi-year strategic plan.
Risks and the Path Ahead
Looking ahead, Dell Technologies continues to operate in highly competitive and cyclical markets. Demand for PCs, servers and storage can fluctuate with corporate spending cycles, broader macroeconomic conditions and technology transitions such as cloud adoption and artificial intelligence. Components costs, supply-chain constraints and pricing pressure from large enterprise and hyperscale customers can also introduce volatility.
Nevertheless, Dell has sought to position itself to benefit from structural trends in data growth, edge computing and AI-enabled workloads. For long-term investors, the key questions for the next decade will be whether Dell can continue to:
- Grow free cash flow across cycles,
- Maintain or improve competitive positioning in core infrastructure and client segments, and
- Allocate capital in a way that compounds per-share value through buybacks, dividends and targeted investment.
Past performance is not a guarantee of future results, and the exceptional 10-year outcome described here should not be extrapolated mechanically. However, it does provide a concrete example of how a disciplined, long-term approach, combined with reinvestment of dividends, can transform what begins as a relatively modest $10,000 allocation into a meaningful capital sum.
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