Amgen 2-decade ‘Buy and Hold’ Result – My Morning Joe Stock Watch

“Someone is sitting in the shade today because someone planted a tree a long time ago.”

– Warren Buffett

The above quote from Warren Buffett is timeless and focuses on the choice around time horizon that every investor should consider before buying a stock they are considering. Behind every stock is an actual business; what will it business similar over a period of twenty years?

Today, let’s look back in time to 2001 and look at what happened to investors who asked just that question about Amgen Inc (NASD: AMGN) by looking at the return on investment over a 20-year holding period.

Start date: 02/15/2001
$ 10,000

$ 41,556

End date: 02/12/2021
Starting price / share: $ 72.06
Closing price / share: $ 237.21
Start shares: 138.77
Closing of shares: 175.26
Dividend reinvested / share: $ 37.32
Total return: 315.74%
Average annual return: 7.38%
Start investing: $ 10,000.00
Completion of investment: $ 41,556.35

The above analysis shows that the twenty-year investment result worked well with an annual return of 7.38%. This would have turned into a $ 10,000 investment made 20 years ago $ 41,556.35 today (as of 02/12/2021). On a total return, it is a result of 315.74% (something to think about: how can AMGN shares perform during Next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

In addition to changes in the share price, another component of AMGN’s total return over the past 20 years has been Amgen Inc’s payment of $ 37.32 / share in dividends to shareholders. Automatic reinvestment of dividends can be a wonderful way to put together returns, and for the above calculations, we assume that dividends are reinvested in additional shares. (In connection with these calculations, the final price is used on ex-date).

Based on the latest annual dividend rate of 7.04 / share, we calculate it AMGN has a current dividend of approx. 2.97%. Another interesting data point we can examine is ‘cost return’ – in other words, we can express the current annual dividend of 7.04 against the original $ 72.06 / purchase price. This turns out to give a yield of 4.12%.

More investment wisdom to consider:
“If a speculator is correct half the time, he hits a good average. Even being right 3 or 4 times out of 10 should give a person a fortune if he intends to cut his losses quickly in the bets where he makes mistakes. ” – Bernard Baruch

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