Will Warren Buffett-Led Berkshire Hathaway Join the Dow Jones Industrial Average if It Issues Another Stock Split?

Core Viewpoint - Berkshire Hathaway is currently valued at $1.11 trillion, making it the seventh most valuable U.S.-based company, despite not being included in the Dow Jones Industrial Average [1][11]. Stock Split Considerations - A potential stock split of Berkshire's Class B shares could enhance its chances of being included in the Dow, as the index is price-weighted and favors companies with lower share prices [2][5]. - The last stock split occurred 15 years ago, and a new split could lower the share price to align with the median price of Dow components, which is around $225 [3][5][6]. - Current trading conditions, such as zero-commission trading and fractional shares, reduce the necessity for a stock split to attract investors [4][11]. Dow Jones Industrial Average Dynamics - The Dow is heavily weighted towards financial sector companies, which collectively account for 25.1% of the index, making it challenging for Berkshire to be included due to potential redundancies with existing components [7][9]. - If Berkshire were to split its stock, it might replace Travelers Companies, but its diverse business operations extend beyond insurance [8][9]. Investment Rationale - The fundamental strength of Berkshire's underlying businesses and its diversification across various markets are the primary reasons to consider it a buy, rather than the potential for a stock split or inclusion in the Dow [12][14]. - Berkshire holds a record high of $334.2 billion in cash and equivalents, providing significant resources for future investments [14][15].