Why does berkshire not pay dividends

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Help us personalize your experience. Got it. Knowing your investable assets will help us build and prioritize features that will suit your investment needs. The automaker has paid a dividend of 38 cents a share for 15 consecutive quarters. For one, General Motors is an iconic American brand and, as the No.

GM also looks great from a valuation perspective. But the stock currently is bargain-priced: It trades at a meager 5. The fact WFC has been a reliable dividend payer certainly helps the case for owning shares. Berkshire Hathaway first bought shares in WFC in The payout is rock-solid, if history is any guide. The company most recently upped its payout in February, to 42 Canadian cents a share from 36 Canadian cents a share — a The company originally invested in the energy giant in , then sold the entirety of the position three years later.

Suncor — an integrated energy giant whose operations span oil sands developments, offshore oil production, biofuels and even wind energy — also sells its refined fuel via a network of more than 1, Petro-Canada stations. Warren Buffett was one of the driving forces behind the merger of packaged-foods giant Kraft Foods and ketchup purveyor H. Skip to header Skip to main content Skip to footer. Home investing stocks. The 10 Cheapest Warren Buffett Stocks. Best Online Brokers, Stock Market Today.

Over time, it has built an enviable position that capitalizes on economic growth in a variety of ways. For investors, Berkshire has many of the characteristics of a great investment — a wide economic moat, a strong track record, and a management team that recognizes the value of taking care of shareholders.

The only thing missing is a dividend. However, given the year reign of Warren Buffett at the top of the company, investors might wonder if this hard line policy of no dividends will change when he eventually steps down. All you get with Berkshire stock is that you can stick it in your safe deposit box, and every year you take it out and fondle it.

If Berkshire were to pay a dividend, every dollar of dividend payments received by shareholders would be one dollar fewer being managed by Buffett. Unless investors believe they can outperform Warren Buffett, dividends are detrimental to total returns as a shareholder of Berkshire Hathaway.

Buffett understands this, and he is against dividend payments as a result. However, Buffett is 89 years old, and thus will eventually be replaced as CEO of Berkshire, potentially in the not-too-distant future. If these tests are met, retaining earnings has made sense. According to Berkshire, from the company grew its per-share market value by This is why Buffett believes he can always find a better use for cash than to simply pay it out to shareholders.

For investors that want to see a cash dividend from Berkshire, there appears to be some hope. These individuals are Todd Combs and Ted Weschler, two ex-hedge fund managers personally selected by Buffett.