“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 lens for evaluating whether a stock has rewarded patience through a combination of price appreciation, dividends, and reinvestment. For STERIS plc (NYSE: STE), a $10,000 investment made on 08/10/2021 and held through 08/07/2026 grew to $11,417.67 with dividends reinvested, producing a total return of 14.15% and an annualized return of 2.69%.
That result places the emphasis where it belongs: on total return, not share price alone. Over this period, STE delivered a modest gain, with dividend reinvestment contributing meaningfully to the ending value even though the stock’s price appreciation was limited relative to the length of the holding period.
STE 5-Year Return Details
| Start date: | 08/10/2021 |
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| End date: | 08/07/2026 | ||||
| Start price/share: | $217.62 | ||||
| End price/share: | $237.47 | ||||
| Starting shares: | 45.95 | ||||
| Ending shares: | 48.07 | ||||
| Dividends reinvested/share: | $9.85 | ||||
| Total return: | 14.15% | ||||
| Average annual return: | 2.69% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $11,417.67 | ||||
The share price rose from $217.62 to $237.47 over the period, while reinvested dividends increased the share count from 45.95 to 48.07. In practical terms, the investment outcome came from two sources:
- modest capital appreciation in the stock price; and
- cash dividends that, when reinvested, purchased additional shares over time.
This distinction matters. Looking only at the stock’s starting and ending price would understate the actual economic return earned by a shareholder who reinvested distributions.
How Dividends Affected STE Total Return
Over the five-year period in this analysis, STERIS paid $9.85 per share in dividends, and the return calculation assumes those dividends were reinvested into additional shares using the closing price on the ex-dividend date. That is why the ending share count is higher than the starting share count.
For dividend-paying stocks, reinvestment can be especially important when price appreciation is moderate. Even a relatively low yield can add to long-term compounding if distributions continue and are consistently redeployed into the same holding.
Current Yield and Yield on Cost
Based on the most recent annualized dividend rate of $2.76 per share, STE has a current dividend yield of approximately 1.16% using the ending share price of $237.47.
Another useful measure is yield on cost, which compares the current annualized dividend with the original purchase price. Using the 08/10/2021 starting price of $217.62, the current annualized dividend implies a yield on cost of about 1.27%.
What the 5-Year Result Suggests
The STERIS five-year return profile shown here reflects a business that generated a positive shareholder outcome, but not an especially strong one over this specific entry point and time frame. A 14.15% cumulative return across roughly five years is materially different from the kinds of compound returns investors often associate with exceptional long-term equity performance.
That does not by itself resolve whether STE is attractively positioned from here. It does, however, illustrate an important point: entry valuation, dividend policy, and the pace of underlying business growth all influence realized returns. Even for established companies with recurring demand characteristics, a five-year holding period can produce only moderate gains if multiple expansion is limited or starting valuation is demanding.
[These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
“Our job is to find a few intelligent things to do, not to keep up with every damn thing in the world.” — Charlie Munger
