OMAH: Extracting Dividends From Berkshire, 15% Distribution

2025-10-02 23:45:00 ET

Thesis

Warren Buffett is a legendary investor, and Berkshire Hathaway Inc. (BRK.B) is a company that is admired by a huge number of investors. The name has produced stellar results throughout time by focusing on well-run businesses and holding them for prolonged periods. The only issue investors sometimes have with Berkshire is the lack of a dividend. The reasoning behind this tactic is that the company can use that capital more effectively than investors:

Buffett's investment prowess has delivered a 19.8% compounded annual return from 1965 to 2023, compared to the S&P 500's 10.2% compounded annual return over the same period. This is why he believes Berkshire shareholders are better served when he retains all the company's earnings and reinvests it rather than paying it out as dividends.

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