“I buy on the assumption that they could close the market the next day and not reopen it for five years.”
— Warren Buffett
A five-year holding period offers a useful framework for evaluating total return, especially in a large-cap industrial and aerospace name such as RTX Corp (NYSE: RTX). For investors considering long-term compounding, the key question is straightforward: what did a $10,000 investment in RTX made in April 2021 become by April 2026, assuming dividends were reinvested? The result was a gain from $10,000 to $27,766.09, illustrating how capital appreciation and dividend reinvestment combined to drive returns.
RTX 5-Year Return Details
| Start date: | 04/21/2021 |
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| End date: | 04/20/2026 | ||||
| Start price/share: | $78.87 | ||||
| End price/share: | $195.79 | ||||
| Starting shares: | 126.79 | ||||
| Ending shares: | 141.82 | ||||
| Dividends reinvested/share: | $11.84 | ||||
| Total return: | 177.66% | ||||
| Average annual return: | 22.66% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $27,766.09 | ||||
The math is simple but meaningful. Over the period from 04/21/2021 through 04/20/2026, RTX produced a total return of 177.66%, equivalent to an average annual return of 22.66%. That is the difference between nominal price movement and fully compounded shareholder return: the ending value reflects both the increase in RTX stock price and the effect of reinvesting cash dividends into additional shares.
These figures were computed with the Dividend Channel DRIP Returns Calculator, using the standard assumption that dividends are reinvested at the closing price on the ex-dividend date.
What Drove the Return?
RTX’s five-year outcome was driven primarily by share-price appreciation, with dividends adding a secondary but still important contribution. The stock price rose from $78.87 to $195.79 over the measured period, while dividend reinvestment increased the share count from 126.79 shares to 141.82 shares. That incremental share growth matters because each reinvested dividend purchased additional shares that could then participate in subsequent price gains and future dividend payments.
In practical terms, the return came from three sources:
- Capital appreciation: the value of each original share increased substantially over the five-year period.
- Cash dividends: RTX paid $11.84 per share in cumulative dividends across the period examined.
- Reinvestment compounding: those dividends bought additional shares, increasing total ownership over time.
This distinction is important because strong long-term returns in dividend-paying equities often depend on more than just the headline stock chart. A stock that compounds through both price appreciation and disciplined cash distributions can generate a materially different result from a non-dividend payer with the same starting valuation.
RTX Dividend Yield and Yield on Cost
Based on the most recent annualized dividend rate of $2.72 per share, RTX currently yields approximately 1.39%. That current yield reflects the dividend relative to the more recent market price, not the original purchase price from 2021.
A separate measure, yield on cost, compares the current annual dividend to the original entry price. Using the 2021 purchase price of $78.87 per share, the current annualized dividend of $2.72 translates to a yield on cost of about 1.76%.
In concise terms:
- Current yield: annual dividend divided by the current share price.
- Yield on cost: annual dividend divided by the original purchase price.
Yield on cost is not a valuation metric, but it can help illustrate how dividend growth affects the economics of a long-held position. For long-duration holdings, rising dividends can gradually improve cash yield relative to the initial capital committed.
Why the Five-Year View Matters
Short-term price moves can obscure the underlying economics of an investment. A five-year measurement window captures more of the full cycle: operating performance, shifts in market sentiment, changes in interest-rate conditions, and the cumulative effect of dividend policy. For a company such as RTX, whose business mix spans aerospace and defense, that longer lens is often more informative than isolated quarterly volatility.
It also provides a cleaner way to compare return components. In RTX’s case, the five-year holding period demonstrates that a moderate dividend yield can still meaningfully enhance total return when combined with a strong move in the underlying share price.
Bottom Line
A $10,000 investment in RTX stock on 04/21/2021 would have grown to $27,766.09 by 04/20/2026 with dividends reinvested. The position delivered a 177.66% total return and a 22.66% annualized return over the period. The result underscores a core point of long-term equity investing: when price appreciation and dividend reinvestment work together, compounding can become the dominant driver of wealth creation.
One more investment quote to leave you with:
“You can get in much more trouble with a good idea than a bad idea, because you forget that the good idea has limits.” — Benjamin Graham
