What Is the Dividend Payout for Berkshire Hathaway?
Berkshire Hathaway, led by Warren Buffett, does not pay dividends despite generating significant dividend income from its investments. The company focuses on reinvesting earnings for growth, acquiring businesses, and share repurchases. Buffett has indicated that dividends may be considered when excess cash is available, but this is not expected in the near future. Currently, Berkshire holds substantial cash reserves, making it a strong investment choice, but not for those seeking immediate dividend income.
If you're in the market for dividend income, good for you! It's hard to beat the power of dividend investing. Not only do you get a regular stock that will, ideally, grow in value over time, but it will also regularly plunk extra dollars into your investment account.
If you're retired, that retirement income can come in very handy -- without requiring you to shave off any shares. If you're a pre-retiree, you might just reinvest those dividends into more shares of stock. Better still, healthy and growing dividend-paying companies will generally increase their payouts over time.
Image source: The Motley Fool.
It's reasonable to wonder whether Warren Buffett's Berkshire Hathaway (BRK.A -0.69%) (BRK.B -0.49%) would be a good dividend-paying stock for you. It's certainly a terrific stock to own. It specializes in insurance, energy, and transportation, and encompasses many businesses owned outright (such as GEICO, Benjamin Moore, Dairy Queen, McLane, and the entire BNSF railroad), along with sizable chunks of other companies (such as Apple, American Express, Coca-Cola, and Bank of America).
Here's the catch, though: Berkshire doesn't pay a dividend!
Buffett does love dividends, though. Thanks to the shares of stock owned by Berkshire, the company collects more than $5 billion in dividend income annually. So why no dividends from the company? Well, remember that when a company earns income, it can do many things with it. It might use that money to fuel growth -- and that's why many young, faster-growing companies opt not to pay dividends. It might alternatively pay down debts, acquire other companies, buy investments, or repurchase shares. Buffett does like to repurchase shares when they seem undervalued to him, and he's famous for buying other businesses when he finds ones he likes available at a great or good price.
Buffett has explained that, essentially, when Berkshire has more cash than can be deployed in useful ways, it might initiate a dividend. But that might not happen for a long time. For now, the company was recently sitting on about $277 billion in cash!
