“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
A 10-year holding period can reveal far more about an equity investment than short-term price moves. In the case of CDW Corp (NASD: CDW), a $10,000 investment made in May 2016 and held through May 2026 produced a strong total return, supported by both share-price appreciation and reinvested dividends.
CDW is best known as an information technology solutions provider serving business, government, education, and healthcare customers. That business profile matters in a long-term return analysis: companies with recurring customer relationships, broad enterprise exposure, and steady cash generation often have more room to compound over time than the market may initially recognize.
The question, then, is straightforward: how did a buy-and-hold investment in CDW stock actually perform over the last decade?
CDW 10-Year Return at a Glance
| Start date: | 05/04/2016 |
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| End date: | 05/01/2026 | ||||
| Start price/share: | $40.66 | ||||
| End price/share: | $136.03 | ||||
| Starting shares: | 245.94 | ||||
| Ending shares: | 277.21 | ||||
| Dividends reinvested/share: | $16.60 | ||||
| Total return: | 277.09% | ||||
| Average annual return: | 14.20% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $37,714.04 | ||||
Over the period from 05/04/2016 to 05/01/2026, CDW generated an annualized return of 14.20%, turning $10,000 into $37,714.04 with dividends reinvested. That equates to a total return of 277.09%. [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
What Drove CDW’s 10-Year Investment Return?
The result came from two reinforcing sources of return:
- Capital appreciation: the share price rose from $40.66 to $136.03.
- Dividend reinvestment: cash distributions were used to purchase additional shares over time, increasing the share count from 245.94 to 277.21.
That distinction matters. Price appreciation did most of the heavy lifting, but reinvested dividends added incremental ownership along the way. In long holding periods, even a modest dividend can improve total return by steadily increasing the number of shares participating in future gains.
For CDW, the dividend component was not the primary return driver, but it was still meaningful. The analysis shows $16.60 per share in dividends reinvested during the period examined. Because those distributions were reinvested rather than taken in cash, the investment benefited from compounding rather than simple income collection.
How Dividend Reinvestment Changed the Outcome
Dividend reinvestment is often most powerful when paired with a business that can also grow earnings and cash flow over time. That combination allows investors to accumulate more shares while the underlying equity value is also rising.
In this case, the original investment purchased 245.94 shares. By the end of the period, reinvestment had increased that position to 277.21 shares. Those extra shares then participated in CDW’s higher ending stock price, magnifying the final portfolio value.
The calculations above assume dividends were reinvested using the closing price on the ex-dividend date. That is a standard way to model a dividend reinvestment plan, or DRIP, and it provides a cleaner picture of total return than price performance alone.
Current Yield and Yield on Cost
Based on the most recent annualized dividend rate of $2.52 per share, CDW has a current yield of approximately 1.85% using the ending share price shown above. While that is not a high-yield profile, it illustrates an important principle: a lower current yield can still contribute meaningfully to long-term returns when combined with sustained business growth and dividend increases over time.
Another useful measure is yield on cost, which compares the current annualized dividend to the original purchase price. Using the 2016 entry price of $40.66 per share, CDW’s current annualized dividend implies a yield on cost of roughly 4.55%.
Yield on cost does not describe the return available to a new buyer today. Instead, it shows how income generation can improve for a long-term holder when a company steadily raises its dividend after the initial investment is made.
Key Takeaways From This CDW Investment Example
- A $10,000 investment in CDW in May 2016 grew to $37,714.04 by May 2026.
- The total return was 277.09%, or 14.20% annualized.
- Most of the gain came from share-price appreciation, with reinvested dividends providing additional compounding.
- CDW’s dividend profile was modest in current-yield terms, but still valuable in a total-return framework.
- The increase in ending shares from 245.94 to 277.21 demonstrates how reinvestment can enhance long-run outcomes.
Viewed through a long-term lens, CDW’s performance over the past decade underscores a familiar point in equity investing: strong outcomes often come from durable business execution, time in the market, and disciplined reinvestment rather than from trying to trade around short-term volatility.
More investment wisdom to ponder:
“Most investors want to do today what they should have done yesterday.” — Larry Summers
