Berkshire Hathaway does not pay dividends, and the company has not paid them since 1967

Berkshire Hathaway, the investment company run by Warren Buffett, stopped paying dividends over 50 years ago and has no plan to restart them. Instead of returning cash to shareholders through dividends, Berkshire reinvests its earnings into new businesses, expands existing ones, and buys back its own stock. This is an intentional strategy — the company believes reinvesting money will create more value for shareholders over time than sending cash out the door.

If you own Berkshire stock, you will not receive quarterly or annual dividend payments. Your return comes from the stock price going up as the company grows and becomes more valuable. This approach works very differently from most large public companies, which typically pay dividends to reward shareholders for holding their stock.

Key Takeaways

  • Berkshire Hathaway has paid no dividends since 1967 and does not plan to start paying them.
  • The company returns value to shareholders through stock price appreciation and share buybacks instead of dividend payments.
  • Berkshire offers two share classes: Class A (the original, much more expensive shares) and Class B (created in 1996 as a lower-cost option), and neither pays dividends.
  • Investors who need regular income from their holdings should look for dividend-paying stocks rather than Berkshire shares.

Why Berkshire stopped paying dividends in 1967

Berkshire Hathaway was originally a textile manufacturing company that paid dividends to shareholders. In the mid-1960s, Warren Buffett and his investment partner Charlie Munger took control of the company and shifted its entire purpose. They decided the company would become an investment vehicle — a holding company that buys and operates other businesses.

Once that strategy took hold, paying dividends no longer made sense. Buffett believed that reinvesting earnings into new acquisitions and business improvements would generate better long-term returns than distributing cash to shareholders. The company stopped paying dividends in 1967 and has maintained that policy ever since. Shareholders who wanted regular income sold their shares; those who stayed were betting on the company's growth.

How Berkshire returns value to shareholders without dividends

Berkshire uses two main methods to reward shareholders instead of paying dividends. The first is share buybacks — the company buys its own stock back from the market when Buffett believes the stock price is below what the business is actually worth. When Berkshire repurchases shares, the remaining shares represent a larger piece of the company's earnings, so each share becomes more valuable.

The second method is stock price appreciation. As Berkshire's businesses generate profits and grow, the company becomes more valuable overall. That increased value shows up in the stock price. A shareholder who bought Berkshire stock 20 years ago and held it has made money because the stock price has risen, not because of dividend checks.

Berkshire also holds a massive portfolio of stocks in other companies — including companies that do pay dividends, like Coca-Cola and American Express. Those dividends flow to Berkshire, not to Berkshire shareholders. Buffett reinvests that income into whatever he believes will create the most value.

Class A shares versus Class B shares — both have no dividend

Berkshire offers two types of stock: Class A and Class B. Class A shares are the original shares and are extremely expensive — they trade for hundreds of thousands of dollars per share. Class B shares were created in 1996 as a lower-cost alternative so smaller investors could own Berkshire stock without needing a fortune.

The key point for dividend purposes is that neither class pays dividends. Class B shares are worth roughly 1/1,500th of a Class A share, but they have the same dividend policy: zero. If you own either type of Berkshire stock, you will not receive dividend payments. Your return depends entirely on the stock price moving up.

What to do if you need dividend income

If you are looking for stocks that pay regular dividends, Berkshire is not the right choice. Many large, stable companies — utilities, consumer staples companies, banks, and real estate investment trusts (REITs) — pay dividends quarterly or annually. Those stocks are designed for investors who want cash income alongside potential stock price growth.

Berkshire is designed for investors who can wait for returns and do not need cash from their investments right now. It works well in retirement accounts where you are not withdrawing money yet, or for investors building wealth over decades. If you need income today, look for dividend-paying stocks or dividend-focused funds instead.

The tax advantage of no dividends

One practical benefit of Berkshire's no-dividend policy is tax efficiency. When a company pays dividends, shareholders owe federal income tax on that money in the year they receive it. With Berkshire, you owe no tax until you sell the stock — and then you only owe tax on your gain (the difference between what you paid and what you sold it for).

This tax deferral can be powerful over decades. Your money compounds without being reduced by annual dividend taxes. Of course, this only matters if you hold the stock for a long time. If you buy and sell Berkshire shares frequently, the tax advantage disappears.

Frequently Asked Questions

Will Berkshire ever start paying dividends?

Buffett has stated that Berkshire will not pay dividends while he is running the company. After his death, the board could theoretically change the policy, but there is no indication they plan to. The no-dividend approach is core to how Berkshire operates.

Do I owe taxes on Berkshire stock if it pays no dividends?

You owe no federal income tax while you hold the stock, regardless of how much it grows. You owe capital gains tax only when you sell — calculated on the profit you made. This makes Berkshire tax-efficient for long-term holders.

Can I reinvest dividends if Berkshire paid them?

Berkshire does not pay dividends, so there is nothing to reinvest. However, the company automatically reinvests its earnings into new businesses and buybacks, which achieves a similar effect — your ownership stake grows without you having to do anything.

Is Berkshire a bad investment because it does not pay dividends?

No — it is straightforward a different type of investment. Berkshire is designed for growth, not income. If you need regular cash from your investments, dividend stocks are better. If you can wait for returns and want long-term growth, Berkshire's approach has worked well historically.

What if I own Berkshire stock in a brokerage account and need income?

You can sell a small portion of your shares to create income, similar to how you would use dividend payments. This gives you flexibility — you only sell when you need cash, rather than receiving automatic payments whether you need them or not.