“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
A long holding period can reveal far more about an investment than a short-term price chart. In the case of SBA Communications Corp (NASD: SBAC), a $10,000 investment made in June 2006 and held through June 2026 produced a substantial total return, illustrating how compounding can work over a full market cycle and beyond.
SBA Communications is a wireless communications infrastructure company whose business has historically centered on owning and operating tower assets leased to wireless carriers. That business model tends to be driven by long-lived physical assets, recurring lease revenue, and ongoing demand for network capacity. Over a 20-year period, those characteristics can matter more than short-term market fluctuations.
SBAC 20-Year Return Details
| Start date: | 06/26/2006 |
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| End date: | 06/24/2026 | ||||
| Start price/share: | $23.20 | ||||
| End price/share: | $185.46 | ||||
| Starting shares: | 431.03 | ||||
| Ending shares: | 472.85 | ||||
| Dividends reinvested/share: | $22.02 | ||||
| Total return: | 776.94% | ||||
| Average annual return: | 11.46% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $87,653.26 | ||||
What the 20-Year SBAC Return Shows
Over the full holding period, the investment grew from $10,000 to $87,653.26, assuming dividends were reinvested. That equates to a total return of 776.94% and an annualized return of 11.46%. [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
The significance of the annualized figure is that it translates a two-decade result into a comparable yearly rate. An 11.46% compound annual return sustained over 20 years is the kind of outcome that materially changes capital levels, even without additional contributions.
It is also notable that the ending value did not come solely from a higher share price. Total return combines two sources of investor gain:
- Capital appreciation, reflected in the rise from $23.20 per share to $185.46 per share
- Cash dividends, which in this case were assumed to be reinvested to purchase additional shares
That distinction matters because total return is generally the more complete measure of long-term equity performance. Price return shows what the stock did. Total return shows what the investment did.
The Role of Dividend Reinvestment
During the period analyzed, SBA Communications paid a cumulative $22.02 per share in dividends. With reinvestment, the original 431.03 shares grew to 472.85 shares by the end of the holding period. That increase in share count demonstrates the mechanical benefit of reinvestment: distributions buy additional shares, and those shares can then participate in future price gains and future dividends.
In practical terms, dividend reinvestment adds a compounding layer that is easy to overlook when focusing only on the stock chart. The effect may appear modest in any single year, but over long periods it can become meaningful, particularly when the underlying company continues to grow cash flow and maintain its payout.
Current Yield and Yield on Cost
Based on the most recent annualized dividend rate of $5 per share, SBAC has a current yield of approximately 2.70% using the ending share price of $185.46.
Another useful lens is yield on cost, which compares the current annual dividend with the original purchase price. Using the 2006 entry price of $23.20 per share, the current annualized dividend implies a yield on cost of 21.55%.
Yield on cost does not indicate what a new buyer would earn at today’s price, but it can be a helpful way to illustrate how dividend growth rewards patient holders over time. For long-duration investments, a rising dividend can turn an initially modest yield into a much larger income stream relative to the original capital committed.
Why Long-Term Returns in Tower Stocks Can Compound
Wireless tower companies have often been attractive long-term compounders because they sit within the communications infrastructure layer rather than at the consumer service layer. As mobile data usage grows and carriers densify networks, tower owners can benefit from lease escalators, additional equipment colocations, and relatively predictable recurring revenue streams.
For SBA Communications, the long-term investment case has historically depended less on economic cyclicality than on network demand, spectrum deployment, and carrier capital spending. That does not eliminate risk, but it does help explain why infrastructure-oriented businesses can sometimes deliver durable compounding over long periods.
Key Takeaways
- A $10,000 investment in SBA Communications in June 2006 grew to $87,653.26 by June 2026
- The position generated a 776.94% total return with dividends reinvested
- The annualized return over the 20-year period was 11.46%
- Reinvested dividends increased the share count from 431.03 to 472.85 shares
- At a $5 annualized dividend rate, the current yield is about 2.70%, while yield on cost is approximately 21.55%
Over 20 years, the SBAC investment result underscores a basic point about long-term equity ownership: sustained compounding is often driven by the combination of business durability, reinvested cash distributions, and time. When those elements work together, the eventual outcome can look very different from what was visible at the start.
One final observation captures the appeal of cash distributions in long-term investing:
“You can’t restate a dividend.” — Malon Wilkus
