Berkshire Hathaway Class B does not pay dividends

Berkshire Hathaway Inc. Class B stock (BRK.B) has never paid a dividend to shareholders. The company retains all earnings and reinvests them into the business. This policy has remained unchanged since Berkshire Hathaway became a public company in 1965, even as the stock price has grown substantially over decades.

Warren Buffett, Berkshire's chairman and primary decision-maker, has stated that the company can deploy retained capital more effectively than shareholders could use dividend payments. Instead of sending cash out to investors, Berkshire buys back its own stock, acquires entire businesses, and holds large cash reserves for opportunities.

If you own BRK.B shares, you will not receive quarterly or annual dividend payments. Your return comes entirely from stock price appreciation — the increase in what your shares are worth over time.

Key Takeaways

  • Berkshire Hathaway Class B stock has never paid dividends and the company has no plans to start.
  • The company reinvests all earnings into acquisitions, stock buybacks, and cash reserves instead.
  • Your return as a BRK.B shareholder comes from the stock price rising, not from dividend income.
  • Class A shares (BRK.A) also do not pay dividends and follow the same retention policy.
  • This structure means Berkshire shareholders may owe capital gains taxes when they sell, rather than annual dividend taxes.

Why Berkshire does not pay dividends

Buffett has long argued that Berkshire can reinvest shareholder money at returns higher than most investors could achieve on their own. By keeping cash in the company, Berkshire can buy entire businesses — like GEICO insurance, Duracell batteries, and Precision Castparts — or purchase shares of other companies at attractive prices.

Paying a dividend would force the company to send cash out to shareholders, many of whom would then have to pay income tax on that money. Buffett views this as inefficient. He prefers to let shareholders decide when to sell their stock and realize gains, which gives them more control over their own tax situation.

Berkshire also maintains a large cash position — sometimes exceeding $100 billion — to be ready for major acquisitions or to weather economic downturns. Dividends would reduce that financial flexibility.

How you make money from BRK.B stock

Your profit from owning Berkshire Class B shares comes from capital appreciation: the stock price increasing over time. If you buy shares at $300 and sell them at $350, you have a $50 per share gain. That gain is subject to capital gains tax when you sell, but only then.

You do not receive regular cash payments. There are no quarterly dividend checks, no dividend reinvestment plans (DRIPs), and no dividend yield to compare against other stocks. This makes Berkshire fundamentally different from dividend-paying stocks like utilities, consumer staples companies, or real estate investment trusts (REITs).

Some investors prefer this structure because it defers taxes until they choose to sell. Others prefer dividend stocks because they want regular income. Your choice depends on whether you need current cash flow or prefer to let your investment grow untaxed until you sell.

Berkshire Class A versus Class B

Berkshire Hathaway has two share classes: Class A (BRK.A) and Class B (BRK.B). Class A shares are the original shares and trade for a much higher price — typically in the range of $600,000 to $700,000 per share. Class B shares were created in 1996 as a lower-priced alternative, with each Class B share worth roughly 1/1500th of a Class A share.

Both classes follow the exact same dividend policy: neither pays dividends. The only meaningful difference between them is price and liquidity. Class B shares are easier for individual investors to buy because they cost less per share, but the underlying company policy is identical.

Tax implications of owning BRK.B without dividends

Because Berkshire does not pay dividends, you will not owe annual dividend income tax on your shares. You only owe capital gains tax when you sell the stock at a profit. This can be an advantage if you hold the stock for many years without selling, because your tax bill is deferred.

If you hold BRK.B for more than one year before selling, you will owe long-term capital gains tax, which is typically lower than short-term rates. If you sell within one year, you owe short-term capital gains tax at your ordinary income tax rate. The exact rate depends on your income level and your state.

This tax structure is different from dividend-paying stocks, where you owe tax each year on the dividends you receive, whether or not you sell the stock. Some investors find the Berkshire structure preferable; others prefer the steady income and lower tax rate of may have access to dividends.

Alternatives if you want dividend income

If you want to own Berkshire stock but also need regular dividend income, you have limited options. You cannot create dividends from BRK.B shares themselves. However, you could own both Berkshire stock and dividend-paying stocks in the same portfolio to generate the income you need.

Another approach is to sell a small portion of your Berkshire shares periodically and use the proceeds as income. This is sometimes called a "systematic withdrawal" strategy. You would owe capital gains tax on the shares you sell, but you would have cash to spend.

Some investors also use covered call strategies — selling call options against their Berkshire shares to generate income — but this is an advanced tactic and carries its own risks and tax consequences.

Frequently Asked Questions

Has Berkshire Hathaway ever paid a dividend?

No. Berkshire has never paid a dividend in its entire history as a public company. The company's policy of retaining all earnings has been consistent since 1965, and Warren Buffett has shown no indication of changing it.

Will Berkshire Hathaway start paying dividends in the future?

There is no indication that Berkshire plans to start paying dividends. Buffett has stated that he believes the company can deploy capital more effectively than shareholders could, and that philosophy shows no signs of changing. Any major policy shift would likely require a change in leadership.

Is BRK.B a good stock if I need income?

Berkshire is not a good choice if you need regular dividend income, because it does not pay any. It is better suited to investors who want long-term capital appreciation and can wait to sell shares when they need cash. If income is your priority, look for dividend-paying stocks instead.

Do I owe taxes on BRK.B stock if I don't sell it?

No. Because Berkshire does not pay dividends, you owe no annual tax on the stock as long as you hold it. You only owe capital gains tax when you sell the shares at a profit. This can make Berkshire attractive for tax-deferred growth strategies.

What is the dividend yield of BRK.B?

Berkshire Hathaway Class B has a dividend yield of zero percent, because it does not pay dividends. Dividend yield is calculated by dividing the annual dividend per share by the stock price. With no dividend, the yield is always zero.