Berkshire Hathaway Class A does not pay dividends
Berkshire Hathaway Inc. Class A stock (ticker: BRK.A) has never paid a dividend to shareholders. The company retains all earnings and reinvests them into the business rather than distributing cash to investors. This policy has been consistent since Berkshire Hathaway's founding and remains in place today.
Warren Buffett, Berkshire's chairman and CEO, has stated publicly that the company believes reinvesting profits generates better long-term returns for shareholders than paying dividends would. Berkshire uses retained earnings to buy back its own stock, acquire other companies, and build cash reserves for future opportunities.
If you own Berkshire Hathaway Class A shares, you will not receive quarterly or annual dividend payments. Your return comes entirely from stock price appreciation — the increase in share value over time.
Key Takeaways
- Berkshire Hathaway Class A has never paid dividends and does not plan to start.
- The company reinvests all earnings into acquisitions, stock buybacks, and cash reserves instead.
- Your return as a Class A shareholder depends on the stock price going up, not on receiving cash payments.
- Berkshire Hathaway Class B (BRK.B) also does not pay dividends and follows the same reinvestment strategy.
Why Berkshire Hathaway does not pay dividends
Buffett has explained that Berkshire can reinvest retained earnings at rates of return higher than shareholders could earn on their own. By keeping cash in the company, Berkshire can deploy capital into new businesses, expand existing ones, or repurchase shares at attractive prices. This approach has historically delivered stronger gains than a dividend-paying model would.
The no-dividend policy also gives Berkshire maximum flexibility. The company holds a large cash position — sometimes over $100 billion — to act quickly on major acquisition opportunities or to weather economic downturns. Paying dividends would reduce that financial cushion.
Shareholders who want cash income from their Berkshire holdings must sell shares themselves. This approach also gives investors more control over the timing and tax consequences of their withdrawals, compared to receiving automatic dividend payments.
How Class A and Class B shares differ on dividends
Berkshire Hathaway Class B stock (ticker: BRK.B) also pays no dividends. Class B shares are straightforward a lower-priced version of Class A — each Class B share represents a fractional ownership stake in the same company. Both classes follow identical dividend policy.
The main differences between Class A and Class B are share price and voting rights. Class A shares trade for over $600,000 per share (the price varies daily), while Class B shares trade for roughly 1/1,500th of that amount, making them accessible to individual investors. Class A shareholders have voting rights; Class B shareholders do not. But on dividends, both classes are treated the same: neither receives any.
What happens to Berkshire's profits instead
Berkshire Hathaway's earnings are deployed in several ways. The company uses cash to acquire other businesses outright — major purchases have included GEICO insurance, Burlington Northern Santa Fe railroad, and Precision Castparts. Berkshire also holds a large portfolio of publicly traded stocks in companies like Apple, Bank of America, and Coca-Cola.
Since 2011, Berkshire has also repurchased its own stock regularly. When the company buys back Class A or Class B shares, the number of shares outstanding shrinks, which increases the ownership percentage and earnings per share for remaining shareholders. This is another way retained earnings benefit shareholders without paying dividends.
The company also maintains a substantial cash reserve. As of recent years, Berkshire has held between $100 billion and $150 billion in cash and short-term investments. Buffett views this reserve as essential for seizing opportunities during market downturns or economic crises.
Tax implications of owning non-dividend-paying stock
Because Berkshire pays no dividends, you will not owe federal income tax on dividend payments each year. Your tax liability arises only when you sell shares and realize a capital gain (or loss). This can be advantageous if you prefer to control when you recognize taxable income.
If you hold Berkshire shares in a tax-deferred account like a traditional IRA or 401(k), the lack of dividends makes little difference — you pay no tax on gains inside those accounts anyway. In a regular taxable brokerage account, however, the no-dividend structure means you defer taxes until you sell.
When you do sell, the tax you owe depends on how long you held the shares. If you held them for more than one year, any gain is taxed as a long-term capital gain, which typically has a lower tax rate than ordinary income. If you held them for one year or less, the gain is taxed as short-term capital gain at your ordinary income tax rate.
Comparing Berkshire to dividend-paying stocks
Many large companies pay dividends — investors in stocks like Coca-Cola, Johnson & Johnson, or Procter & Gamble receive regular cash payments. These companies typically pay out a portion of earnings to shareholders while reinvesting the rest. Berkshire takes the opposite approach: zero payout, full reinvestment.
Neither approach is inherently better. Dividend stocks appeal to investors who want current income or who believe the company cannot reinvest earnings profitably. Non-dividend stocks like Berkshire appeal to investors who prioritize long-term capital appreciation and want to control their own tax timing. Your choice depends on your personal financial goals and tax situation.
Over Berkshire's history, the no-dividend strategy has delivered strong returns. Class A shares have appreciated significantly since the company's early years. However, past performance does not may provide future results, and different investors have different needs.
What to do if you need income from Berkshire shares
If you own Berkshire stock and need cash income, you can sell a portion of your shares. This is sometimes called a "systematic withdrawal" strategy. You decide how much cash you need, sell enough shares to raise that amount, and keep the rest invested.
This approach gives you flexibility that dividend payments do not. You can adjust the amount you withdraw each year based on your needs. You also control the timing — you can sell shares when the stock price is high and defer sales when it is low, potentially improving your tax outcome.
Some investors use this method in retirement. Rather than relying on dividend income, they periodically sell shares to fund living expenses. The key is to plan ahead so you are not forced to sell during a market downturn.
Frequently Asked Questions
Will Berkshire Hathaway ever start paying dividends?
Buffett has stated that Berkshire will not pay dividends as long as he is involved with the company and believes it can reinvest capital at high rates of return. After his death, future leadership could change this policy, but there is no indication that will happen. The no-dividend approach is central to Berkshire's investment philosophy.
Do I owe taxes on Berkshire stock I hold but do not sell?
No. You owe no federal income tax straightforward for owning the stock. Tax is due only when you sell and realize a gain (or loss). Some states and localities may have property taxes on investments, but federal tax applies only to the sale.
Is Berkshire Hathaway a good choice if I need dividend income?
Berkshire is not designed for investors seeking regular cash payments. If you need current income, dividend-paying stocks or bonds may be better suited to your situation. Berkshire works best for investors who can reinvest gains or who do not need income for several years.
How does Berkshire's stock price compare to dividend-paying stocks?
Berkshire's stock price has historically grown faster than many dividend-paying stocks, but this varies by company and time period. Comparing returns requires looking at total return — both price appreciation and dividends — over the same period. Different stocks perform differently depending on market conditions and company performance.
Can I reinvest dividends if Berkshire paid them?
Berkshire does not pay dividends, so this is not an option. However, the company's reinvestment of earnings serves a similar function — profits are automatically deployed back into the business rather than paid out to you.