Berkshire’s Decade: A Dividend Hunter’s View

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Let’s play a little thought experiment, shall we? A perfectly reasonable, not-at-all-fanciful notion. Imagine, if you will, that you happened to have five hundred dollars burning a hole in your pocket – a surprisingly common occurrence, I’ve found – and decided to entrust it to the care of Berkshire Hathaway, the company Warren Buffett built. Now, Buffett, as you may know, has recently stepped aside, handing the reins to Greg Abel, a fellow who seems perfectly capable, if somewhat less…iconic. But let’s put that to one side for now. The question is, what would that five hundred dollars be worth after a decade? A decade! It’s a frighteningly long time, really, when you think about it. Almost a geological epoch in the world of finance.

Berkshire Hathaway, for those unfamiliar, is a bit like a particularly well-managed collection of everything. It owns GEICO (insurance, mostly), Benjamin Moore (paint, for those of us who occasionally attempt to brighten our surroundings), See’s Candies (a national obsession, apparently), and the entire BNSF railroad (which, if you’ve ever traveled across America, is a marvel of engineering and, occasionally, exasperating slowness). And then there’s the stock portfolio, a sprawling collection of shares in companies you’ve almost certainly heard of: Apple, American Express, Coca-Cola, Bank of America. It’s a bit like having a very large and diversified biscuit tin, except instead of biscuits, it’s companies. And, crucially, it’s a company that, unlike many others, doesn’t currently pay a dividend. Which, for a dividend hunter like myself, is a bit like finding a library with no books. A curious state of affairs.

A Trillion-Dollar Enterprise

With a market value currently hovering around a trillion dollars – a number so large it’s practically meaningless – Berkshire is what’s known as a ‘blue chip’ stock. Solid, reliable, unlikely to suddenly vanish in a puff of smoke. Though, of course, nothing is entirely certain in this life. The lack of a dividend is a bit of an anomaly, admittedly. Most companies of this size distribute a portion of their profits to shareholders. But there’s speculation that Abel might change that. The company, you see, is positively awash in cash – a staggering $382 billion, as of the last report. It’s enough to make one feel slightly inadequate, frankly. You could buy a small country with that sort of money.

Past Performance & Future Prospects

So, what kind of return can we realistically expect over the next ten years? Well, looking at the past is a good starting point, though past performance, as the financial wizards are so fond of saying, is no guarantee of future results. Still, it’s a bit like looking at a map – it doesn’t tell you exactly where you’ll end up, but it gives you a general idea of the terrain. Over the past year, Berkshire has returned a modest 1.60%. Over three years, a much more respectable 15.53%. Five years: 15.91%. Ten years: 13.90%. Fifteen years: 12.49%. It’s been a pretty good run, all told.

But let’s not get carried away. Berkshire is no longer the nimble, fast-growing company it once was. The stock market as a whole has averaged around 10% annual returns over many decades, and Berkshire is unlikely to significantly outperform that for the foreseeable future. So, let’s be conservative and assume an average annual return of 11% over the next decade. If that happens, your initial $500 investment would grow to around $1,420. Not a fortune, perhaps, but a perfectly respectable return.

Here’s a little table to illustrate the possibilities:

Growing at This Rate $500 Becomes This After 10 Years
7% $984
8% $1,079
9% $1,184
10% $1,297
11% $1,420
12% $1,553
13% $1,697
14% $1,854
15% $2,023

So, should you invest in Berkshire Hathaway? Well, it’s not a bad option, not at all. The shares seem reasonably valued, with a forward-looking price-to-earnings ratio of 22.37, slightly above its five-year average of 21.27. It might not deliver the explosive growth of some tech stocks, but it’s also likely to fall less sharply during a market downturn. Its beta – a measure of volatility – is currently just 0.65, meaning that if the overall market drops by 10%, Berkshire’s stock would likely drop by around 6.5%. Even without Buffett at the helm, Berkshire Hathaway has a lot going for it. And, who knows, perhaps Abel will finally decide to share some of that enormous cash hoard with shareholders. A dividend hunter can dream, can’t he?

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2026-02-04 13:13