Core Viewpoint - Berkshire Hathaway has been selling more stocks than it has been buying, leading to a significant cash position of $381.7 billion, and is considering initiating dividend payments as Warren Buffett prepares to step down in 2026 [1][5][8]. Investment Strategy - Berkshire Hathaway has historically focused on acquiring companies and making stock investments, achieving a remarkable 6 million percent return since 1965, significantly outperforming the S&P 500's 46,000% return [2]. - The company has not paid dividends since 1967, preferring to reinvest earnings to generate higher returns for shareholders [3][5]. Recent Financial Performance - In the third quarter, Berkshire generated an operating profit of $13.5 billion, up from $10 billion year-over-year, and net income increased from $26.3 billion to $30.8 billion [9][10]. - The company holds approximately $360 billion in T-bills, benefiting from higher interest rates, although falling rates may impact future income generation [7]. Potential Changes in Capital Allocation - With Buffett's retirement approaching, there is speculation that Berkshire may alter its capital allocation strategy, potentially initiating dividend payments to provide shareholders with income [4][8][12]. - The company could afford to pay over $20 billion in dividends annually, which would be less than a quarter of its operating profit, allowing it to maintain its cash reserves for future investments [10][11].
Berkshire Hathaway is a Scrooge Stock. Will It Have a Change of Heart and Start Paying Dividends in 2026?