“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— Warren Buffett
A long-term buy-and-hold investment in McCormick & Co Inc (NYSE: MKC) illustrates how total return is built over time through both share-price appreciation and dividend reinvestment. Using a 20-year holding period beginning on 07/03/2006 and ending on 07/01/2026, a $10,000 investment in MKC grew to $47,598.77 with dividends reinvested, according to the figures below.
The result amounts to a 376.04% total return, or an average annual return of 8.11%. For a consumer staples company such as McCormick, that outcome is notable because it reflects the compounding effect of a business model often associated with relatively steady demand, recurring cash generation, and a durable dividend profile.
MKC 20-Year Return Details
| McCormick 20-Year Total Return Snapshot | |||||
| Start date: | 07/03/2006 |
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| End date: | 07/01/2026 | ||||
| Start price/share: | $16.91 | ||||
| End price/share: | $52.91 | ||||
| Starting shares: | 591.37 | ||||
| Ending shares: | 899.71 | ||||
| Dividends reinvested/share: | $19.48 | ||||
| Total return: | 376.04% | ||||
| Average annual return: | 8.11% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $47,598.77 | ||||
On these assumptions, the investment nearly quintupled over the 20-year period. The final value reflects not just the increase in MKC’s share price from $16.91 to $52.91, but also the additional shares accumulated by reinvesting cash distributions along the way. Starting with 591.37 shares, the position grew to 899.71 shares by the end of the period.
[These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
What Drove McCormick’s Total Return
For long holding periods, total return is typically driven by three factors:
- Underlying business performance — revenue growth, margins, and earnings power.
- Dividend income — the cash paid to shareholders over time.
- Reinvestment compounding — dividends used to buy additional shares, which can then generate their own dividends.
In MKC’s case, the dividend component materially affected the outcome. Over the past 20 years, McCormick & Co Inc paid $19.48 per share in dividends. In this analysis, each dividend is assumed to be reinvested into additional MKC shares using the closing price on the ex-dividend date. That reinvestment assumption is what lifted the share count from the initial 591.37 to 899.71 shares.
This distinction matters. A price-only return captures the change from the starting share price to the ending share price. A total return calculation captures both capital appreciation and the income stream. For dividend-paying stocks, especially over multi-decade periods, the difference can be substantial.
MKC Dividend Yield and Yield on Cost
Based on the most recent annualized dividend rate of $1.92 per share, MKC has a current yield of approximately 3.63% using the ending share price of $52.91 in this analysis period.
Another useful lens is yield on cost, which compares the current annualized dividend to the original purchase price. Using the same $1.92 dividend rate and the 2006 purchase price of $16.91 per share, the yield on cost works out to 11.35%.
Yield on cost does not describe what a new buyer would earn at today’s market price. Instead, it shows how the income stream has evolved relative to the original entry price. For long-term dividend holdings, that can be a helpful way to frame the cumulative effect of dividend growth over time.
Why a 20-Year Holding Period Changes the Analysis
A 20-year horizon smooths out many shorter-term market disruptions. For a company like McCormick, which operates in spices, seasonings, flavor solutions, and related consumer staples categories, the long-term thesis has generally centered on brand strength, pricing power, distribution reach, and the resilience of everyday demand. Those characteristics do not eliminate valuation risk or operating risk, but they can support steadier compounding than more cyclical businesses often deliver.
That is also why a long-term review of MKC is more informative when framed in total-return terms rather than price moves alone. Investors who held through multiple market cycles and reinvested dividends participated not only in the stock’s appreciation but also in the incremental ownership created by each distribution.
Key Takeaways From This MKC Buy-and-Hold Example
- A $10,000 investment in MKC on 07/03/2006 grew to $47,598.77 by 07/01/2026 with dividends reinvested.
- The total return was 376.04%, equal to an average annual return of 8.11%.
- Dividend reinvestment increased the position from 591.37 shares to 899.71 shares.
- At an annualized dividend rate of $1.92, the implied current yield at $52.91 is about 3.63%.
- Using the original purchase price of $16.91, yield on cost is approximately 11.35%.
Here’s one more investment quote before you go:
“If you can follow only one bit of data, follow the earnings.” — Peter Lynch
