How an investment of €10,000 in extra storage space worked out in 2019

“I buy on the assumption that they can close the market the next day and not reopen it for another five years.”

– Warren Buffett

Warren Buffett’s investment philosophy calls on investors to consider a long-term horizon when making an investment, such as an investment period of five years (or even longer), and to reconsider the investment at all if they cannot imagine shares will continue. stock for at least five years. Today we look at how such a long-term strategy would have fared for investors in Extra Space Storage Inc (NYSE: EXR) in 2019 and held up to this day.

Starting date: 05/02/2019


End date: 05/01/2024
Starting price/share: $106.46
Final price/share: $138.70
Starting shares: 93.93
End shares: 111.92
Dividends reinvested/share: $24.90
Total refund: 55.23%
Average annual return: 9.19%
Initial investment: $10,000.00
End investment: $15,524.55

As we can see, the five-year investment performance came in well, with an annualized return of 9.19%. This would have turned a $10,000 investment made five years ago into… $15,524.55 today (from 01-05-2024). On a total return basis, that’s a result of 55.23% (something to think about: how can EXR shares perform over the next one 5 years?). (These figures were calculated using the Dividend Channel DRIP Returns Calculator.)

Note that Extra Space Storage Inc paid investors a total of $24.90/share in dividends over the five holding periods, which represented a second component of total return beyond the price change alone. Like watering a tree, reinvesting dividends can help an investment grow over time. For the above calculations, we assume dividend reinvestment (and for this exercise, the closing price on the ex-date is used for the reinvestment of a given dividend).

Based on the most recent annualized dividend rate of 6.48/share, we calculate that EXR has a current yield of approximately 4.67%. Another interesting data point we can explore is return on costs. In other words, we can express the current annualized dividend of 6.48 versus the original purchase price of $106.46 per share. This equates to a return on costs of 4.39%.

Even more investment wisdom to think about:
“Investing is the intersection of economics and psychology.” – Seth Klarman