“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
A long-term holding period can materially change the outcome of an equity investment, particularly when capital appreciation is combined with dividend reinvestment. For L3Harris Technologies Inc (NYSE: LHX), a $10,000 investment made on 05/13/2016 and held through 05/12/2026 would have grown to $49,336.69, assuming dividends were reinvested.
That result reflects both a substantial increase in the share price and the incremental compounding effect of cash distributions being put back to work. Over the full holding period, the investment produced a total return of 393.23%, or an average annual return of 17.30%.
L3Harris 10-Year Return Summary
| Start date: | 05/13/2016 |
|
|||
| End date: | 05/12/2026 | ||||
| Start price/share: | $75.92 | ||||
| End price/share: | $309.47 | ||||
| Starting shares: | 131.72 | ||||
| Ending shares: | 159.38 | ||||
| Dividends reinvested/share: | $36.35 | ||||
| Total return: | 393.23% | ||||
| Average annual return: | 17.30% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $49,336.69 | ||||
The headline figure is straightforward: a $10,000 position in L3Harris would have nearly quintupled over the period. The increase in value came from two sources:
- share price appreciation, from $75.92 to $309.47
- dividends paid over time and reinvested into additional shares
By the end of the period, the original 131.72 shares had grown to 159.38 shares through dividend reinvestment. That increase in share count is an important part of the compounding process, especially over a multi-year horizon.
How Dividend Reinvestment Affected Total Return
L3Harris paid a cumulative $36.35 per share in dividends during the holding period. Reinvesting those payments meant each distribution purchased additional shares, which in turn became eligible for future dividends. This is the core mechanics behind a dividend reinvestment plan, or DRIP.
In practical terms, dividend reinvestment matters most when three conditions are present:
- the company consistently pays dividends
- the holding period is long enough for compounding to accumulate
- the underlying business continues to support earnings, cash flow, and shareholder distributions
For this calculation, dividends are assumed to be reinvested using the closing price on the ex-dividend date. [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Current Dividend Yield and Yield on Cost
Based on the most recent annualized dividend rate of $5 per share, LHX has a current dividend yield of approximately 1.62% at a share price of $309.47.
Another useful measure is yield on cost, which compares the current annual dividend to the original purchase price rather than the current market price. Using the 2016 entry price of $75.92 per share, the current annualized dividend implies a yield on cost of 2.13%.
That distinction is worth noting:
- Current yield measures income relative to today’s share price.
- Yield on cost measures income relative to the original purchase price.
Yield on cost can help illustrate how dividend growth rewards long-term holders, although current yield remains the more relevant figure for assessing a new purchase at current market levels.
Why the 10-Year Result Stands Out
L3Harris operates in defense electronics, communications systems, sensors, and related aerospace and national security markets. Businesses in these areas are often evaluated on backlog, program execution, margins, cash generation, and capital allocation discipline. Over long periods, strong shareholder returns in this part of the market typically depend on a combination of durable demand, consistent free cash flow, and the ability to convert operating performance into per-share growth.
The 2016-to-2026 result also spans a period in which L3Harris evolved through corporate actions, including the 2019 merger of L3 Technologies and Harris Corporation that created the current company. Long-term return calculations such as this one capture that continuity through adjusted pricing and dividend treatment, which is why total return often provides a more complete picture than a simple comparison of starting and ending share prices.
Key Takeaways
- A $10,000 investment in L3Harris on 05/13/2016 grew to $49,336.69 by 05/12/2026.
- Total return over the period was 393.23%.
- The average annual return was 17.30%.
- Dividend reinvestment increased the share count from 131.72 to 159.38.
- The current annualized dividend rate of $5 per share implies a 1.62% current yield and a 2.13% yield on original cost.
One enduring lesson from long-horizon equity returns is that compounding rarely looks dramatic in any single year. Its impact becomes most visible when price appreciation, dividends, and time operate together.
“The ideal business is one that earns very high returns on capital and that keeps using lots of capital at those high returns. That becomes a compounding machine.” — Warren Buffett
