Although Berkshire does not pay out dividends, the shareholders don’t mind. That is because the ROE for Berkshire have been astounding. When your one dollar works harder when invested in Berkshire as compare to Apple for example, you wouldn’t mind leaving that one dollar with them. Else, you would demand that they pay that out so that you can invest in a higher ROE business.
Whats seldom mentioned is that many of Buffett’s personal holdings do give out dividends that have been raise for 20 – 30 years and their yield on cost can be rather astounding
Payouts to Buffett peaked at an estimated $15.5 million a quarter, judging by his publicly disclosed stakes as of Sept. 30 and Dec. 31, 2008. Last year, they tumbled as much as 44 percent as U.S. Bancorp and Wells Fargo & Co., two of his holdings, cut dividends. The fourth-quarter figure was $10.8 million.
Buffett’s portfolio at the end of 2009 included shares of three companies — Exxon Mobil Corp., General Electric Co. and United Parcel Service Inc. — in which Berkshire and its units weren’t invested. Ingersoll-Rand PLC, Johnson & Johnson, Kraft Foods Inc., Procter & Gamble Co. and Wal-Mart Stores Inc. were also among his personal stakes. The filings don’t show his non- U.S. investments or holdings of securities besides stocks.
Dividend income helps explain why Buffett only receives $100,000 a year in salary at Berkshire, according to Robert P. Miles, the author of “Warren Buffett Wealth.” Miles wrote about him last week in an article on Morningstar Inc.’s Web site.
Dividends that rises do matter in the long run.