“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— Warren Buffett
A 20-year holding period can be a useful test of how a business rewards patient shareholders. For Avery Dennison Corp (NYSE: AVY), a buy-and-hold investment made in 2006 produced a solid long-term total return, with both share price appreciation and dividend reinvestment contributing to the outcome.
Using the return profile shown below, a $10,000 investment in Avery Dennison on 08/07/2006 would have grown to $47,853.48 by 08/04/2026, assuming dividends were reinvested. That equates to a total return of 378.62% and an average annual return of 8.14%.
AVY 20-Year Return Summary
| Start date: | 08/07/2006 |
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| End date: | 08/04/2026 | ||||
| Start price/share: | $58.97 | ||||
| End price/share: | $173.30 | ||||
| Starting shares: | 169.58 | ||||
| Ending shares: | 276.18 | ||||
| Dividends reinvested/share: | $39.93 | ||||
| Total return: | 378.62% | ||||
| Average annual return: | 8.14% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $47,853.48 | ||||
What Drove Avery Dennison’s Total Return?
The long-term result reflects two separate sources of shareholder return:
- Capital appreciation: the stock price rose from $58.97 to $173.30 per share.
- Dividend reinvestment: cash distributions were used to purchase additional shares over time, increasing the share count from 169.58 to 276.18.
That distinction matters. Price appreciation alone explains only part of the ending value. Reinvested dividends increased the position size materially over the holding period, allowing later gains to compound on a larger share base.
In total, Avery Dennison paid $39.93 per share in dividends over the period used in this analysis. The calculations assume that each dividend was reinvested into additional AVY shares using the closing price on the ex-dividend date. [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Current Yield and Yield on Cost
Based on the most recent annualized dividend rate of $4.00 per share, AVY has a current dividend yield of approximately 2.31% using the cited share price of $173.30.
Another useful measure is yield on cost, which compares the current annual dividend to the original purchase price. Using the 2006 entry price of $58.97 per share, a $4.00 annualized dividend implies a yield on cost of 6.78%.
Yield on cost does not indicate what a new buyer would earn at today’s market price, but it does illustrate how dividend growth can enhance the income profile of a long-held position.
Key Takeaways From the 20-Year Holding Period
- Time amplified compounding: a moderate annualized return translated into a nearly fivefold increase in capital over two decades.
- Reinvestment mattered: ending shares were substantially higher than starting shares because dividends were continuously reinvested.
- Total return gives the fuller picture: focusing only on share price would understate the long-term contribution from cash distributions.
Avery Dennison’s 20-year buy-and-hold outcome shows how durable total returns can accumulate through a combination of price gains, dividend income, and disciplined reinvestment. For long-horizon analysis, those three elements are best evaluated together rather than in isolation.
“Never test the depth of a river with both feet.” — Warren Buffett
