“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
A 10-year holding period can be a useful test of whether a stock has created value through business performance, dividend growth, and compounding rather than through short-term market sentiment alone. Cintas Corporation (NASD: CTAS) offers a clear example. An investor who bought CTAS in September 2016 and simply held the shares through September 2026 would have realized a substantial total return, especially with dividends reinvested.
The central point is not that every stock rewards patience, but that long-duration ownership in a durable business can produce outsized results when earnings growth, disciplined capital allocation, and dividend reinvestment work together over time. In Cintas, that combination was unusually powerful.
CTAS 10-Year Return at a Glance
| Start date: | 09/14/2016 |
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| End date: | 09/11/2026 | ||||
| Start price/share: | $28.29 | ||||
| End price/share: | $201.50 | ||||
| Starting shares: | 353.48 | ||||
| Ending shares: | 393.96 | ||||
| Dividends reinvested/share: | $10.47 | ||||
| Total return: | 693.83% | ||||
| Average annual return: | 23.03% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $79,407.89 | ||||
A $10,000 investment in CTAS on 09/14/2016 grew to $79,407.89 by 09/11/2026, assuming all dividends were reinvested. That equates to a total return of 693.83% and an annualized return of 23.03%. [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
What Drove the Return?
The result reflects two distinct sources of shareholder return:
- Share price appreciation: CTAS rose from $28.29 to $201.50 per share over the period.
- Dividend reinvestment: Cash distributions were used to purchase additional shares, increasing the share count from 353.48 to 393.96.
That second component matters. Reinvestment added roughly 40.48 shares over the holding period, which then participated in the same stock price appreciation as the original position. This is the mechanism through which compounding becomes more visible over long horizons: dividends do not merely provide income; when reinvested, they can expand the ownership base that benefits from future growth.
Why CTAS Was Well Suited to a Buy-and-Hold Approach
Cintas operates in business services, with operations centered on uniforms, facility services, and related recurring customer relationships. Businesses with recurring demand, route density, customer retention, and steady cash generation often lend themselves to long-term compounding because they can support both earnings growth and consistent dividend increases over time.
That does not make the stock immune to valuation risk or cyclical pressures. However, long holding periods tend to reward companies that combine durable operations with disciplined execution. In CTAS, the 10-year outcome suggests that the market ultimately recognized sustained business performance rather than simply assigning a temporary higher multiple.
Dividend Reinvestment and Yield on Cost
Over the past 10 years, Cintas Corporation paid $10.47 per share in dividends. In the return calculation above, those dividends are assumed to have been reinvested into additional shares at the closing price on each ex-dividend date.
Based on the most recent annualized dividend rate of $2.08 per share, CTAS has a current yield of approximately 1.03% using the ending share price of $201.50. Another useful measure is yield on cost, which compares the current annual dividend to the original purchase price. Using the 2016 starting price of $28.29, the current annualized dividend implies a yield on cost of about 7.35%.
Yield on cost does not describe the return available to a new buyer today, but it does illustrate how dividend growth can improve the income profile of a long-held position. For long-duration equity ownership, that distinction is important: current yield measures what the market offers now, while yield on cost reflects how the original capital has matured over time.
Key Takeaways
- CTAS delivered exceptional long-term total return: $10,000 grew to $79,407.89 in 10 years with dividends reinvested.
- Compounding came from both price gains and reinvestment: the share count increased meaningfully over the holding period.
- Dividend growth can materially change the economics of a position: yield on original cost rises as the dividend increases.
- Long-term stock performance is often driven by business durability: patient ownership tends to work best when the underlying company compounds steadily.
One of the more durable lessons in equity investing is that a small number of long-term winners can have an outsized effect on portfolio results. CTAS demonstrates how that can happen in practice: a strong operating business, held through time and paired with reinvested dividends, turned a routine $10,000 investment into a far larger sum over a decade.
“All you need for a lifetime of successful investing is a few big winners, and the pluses from those will overwhelm the minuses from the stocks that don’t work out.” — Peter Lynch
