“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 can be a useful test of whether a business compounds value in a durable way. For Republic Services Inc (NYSE: RSG), that test produced a strong result: a hypothetical $10,000 investment made on 05/21/2021 grew to $20,661.64 by 05/20/2026, assuming dividends were reinvested. That equates to a 106.60% total return and a 15.62% average annual return.
The result is notable because Republic Services is not typically viewed as a high-growth story. It operates in the solid waste and environmental services industry, a business with recurring demand, route density advantages, and relatively predictable cash generation. Over time, those characteristics can support a combination of share price appreciation, steady dividend growth, and resilient total returns.
RSG 5-Year Return Details
| Start date: | 05/21/2021 |
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| End date: | 05/20/2026 | ||||
| Start price/share: | $109.50 | ||||
| End price/share: | $212.20 | ||||
| Starting shares: | 91.32 | ||||
| Ending shares: | 97.36 | ||||
| Dividends reinvested/share: | $10.58 | ||||
| Total return: | 106.60% | ||||
| Average annual return: | 15.62% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $20,661.64 | ||||
What Drove the Return
The bulk of the gain came from share price appreciation, with the stock rising from $109.50 to $212.20 over the period. Dividends provided an additional return stream, and reinvestment increased the share count from 91.32 to 97.36. In practical terms, the return came from two sources:
- Capital appreciation: the market value of each share increased materially over five years.
- Reinvested dividends: cash distributions were used to purchase additional shares, which then participated in subsequent price appreciation and future dividends.
That distinction matters because total return often differs meaningfully from price return alone, especially in steady compounders that regularly return capital through dividends. The calculations here assume dividend reinvestment at the closing price on each ex-dividend date, consistent with the methodology used by the Dividend Channel DRIP Returns Calculator.
Dividend Contribution and Yield Metrics
Over the five-year holding period, Republic Services paid a cumulative $10.58 per share in dividends. That cash flow was not the primary driver of the investment outcome, but it was a meaningful contributor to total return and to the increase in ending share count.
Using the most recent annualized dividend rate of $2.50 per share and the ending share price of $212.20, the current dividend yield is approximately 1.18%. Measured against the original purchase price of $109.50, the same annualized dividend rate implies a yield on cost of about 2.28%.
Yield on cost does not change the stock’s current market yield, but it can help illustrate how dividend growth affects the income profile of a long-held position. For an investor focused on total return, it is best viewed as a supplementary measure rather than a valuation tool.
Why Republic Services Has Been Resilient
Republic Services operates in a sector with characteristics that can support long-term compounding. Waste collection, transfer, recycling, and landfill operations benefit from recurring service needs and substantial physical infrastructure. In many local markets, route density and disposal assets create scale advantages that are difficult to replicate quickly.
Those operating features can translate into relatively visible revenue, pricing discipline, and strong free cash flow across business cycles. For shareholders, that combination often supports a balanced capital allocation profile: reinvestment in the business, acquisitions where attractive, share repurchases, and a steadily rising dividend.
Key Takeaways
- A $10,000 investment in RSG on 05/21/2021 grew to $20,661.64 by 05/20/2026.
- Total return was 106.60%, with an average annual return of 15.62%.
- The share price increased from $109.50 to $212.20 over the period.
- Dividend reinvestment raised the share count from 91.32 to 97.36.
- Total dividends paid during the holding period amounted to $10.58 per share.
The broader lesson is straightforward: a business with recurring demand, disciplined execution, and consistent shareholder distributions can generate substantial total returns even without relying on a speculative growth narrative. Republic Services’ five-year performance is a clear example of that pattern.
More investment wisdom to ponder:
“The investor’s chief problem, even his worst enemy, is likely to be himself.” — Benjamin Graham
