“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
A long holding period can be especially revealing with defensive, cash-generating businesses. Republic Services Inc (NYSE: RSG), one of the largest waste collection and environmental services companies in the United States, offers a useful example of how compounding can work when steady operating performance is paired with dividend reinvestment. A $10,000 investment made in Republic Services stock on 08/31/2016 would have grown to $51,653.58 by 08/28/2026, based on the assumptions outlined below.
The result reflects both share price appreciation and the effect of reinvested dividends over the period. For a company operating in an industry often viewed as resilient, the magnitude of the return stands out: the investment produced a total return of 416.71%, equivalent to an average annual return of 17.85%.
RSG 10-Year Return Details
| Start date: | 08/31/2016 |
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| End date: | 08/28/2026 | ||||
| Start price/share: | $50.52 | ||||
| End price/share: | $222.11 | ||||
| Starting shares: | 197.94 | ||||
| Ending shares: | 232.64 | ||||
| Dividends reinvested/share: | $18.26 | ||||
| Total return: | 416.71% | ||||
| Average annual return: | 17.85% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $51,653.58 | ||||
On these assumptions, every $1 invested in Republic Services in late August 2016 grew to roughly $5.17 by late August 2026. [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
What Drove the 10-Year Return
The bulk of the gain came from capital appreciation. The share price rose from $50.52 to $222.11, reflecting a substantial re-rating in addition to underlying business growth. Dividends also added meaningfully to total return, particularly because they were assumed to be reinvested throughout the period.
That distinction matters. Looking only at the stock price understates the outcome of a long-term holding in a dividend-paying company. Reinvestment increased the share count from 197.94 shares to 232.64 shares, which in turn amplified the effect of Republic Services’ higher share price by the end of the period.
The Role of Dividend Reinvestment
Over the past 10 years, Republic Services Inc paid $18.26 per share in dividends. In this analysis, those dividends are assumed to have been reinvested into additional shares on the ex-dividend date using the closing price on that date.
That process adds a second layer of compounding:
- Cash dividends purchase incremental shares.
- Those additional shares then receive future dividends.
- If the stock price rises over time, the larger share count lifts ending value further.
For mature businesses with regular dividend payments, this can become a meaningful contributor to long-horizon performance even when the headline yield appears modest.
Current Yield and Yield on Cost
Based on the most recent annualized dividend rate of $2.68 per share, RSG has a current dividend yield of approximately 1.21% using the ending share price of $222.11.
Another useful measure is yield on cost, which compares the current annualized dividend to the original purchase price rather than the current market price. Using the 2016 entry price of $50.52 per share, the current dividend rate implies a yield on cost of about 5.30%.
In practical terms, that means an investor who bought at $50.52 is now earning annual dividend income equal to about 5.30% of the original purchase price per share, before accounting for any additional shares accumulated through reinvestment.
Why Republic Services Has Been a Durable Compounder
Republic Services operates in an essential-service industry with characteristics that often support consistent cash flow: recurring customer relationships, route density, contracted pricing, and significant barriers to entry tied to local infrastructure, permitting, and disposal assets. Waste collection also tends to be less economically sensitive than many industrial end markets, although volumes can still be affected by broader business activity.
Those industry dynamics help explain why waste management companies are frequently viewed as durable compounders rather than high-yield vehicles. The value proposition has generally been steady revenue generation, disciplined capital allocation, and incremental growth in earnings and dividends over time.
Key Takeaways
- A $10,000 investment in Republic Services on 08/31/2016 grew to $51,653.58 by 08/28/2026.
- Total return was 416.71%, or 17.85% annualized.
- Dividend reinvestment increased the share count from 197.94 to 232.64.
- At a $2.68 annualized dividend rate and a $222.11 share price, the current yield is about 1.21%.
- Using the original purchase price of $50.52, the yield on cost is about 5.30%.
More investment wisdom to ponder:
“Sentimentality about an investments leads to lack of discipline.” — Sam Zell
