Who Is The World's Biggest Dividend Investor?

Includes: BRK.A, BRK.B
by: Robert Allan Schwartz

There has been a lot of debate at Seeking Alpha about whether share buybacks are "good" or "bad". Before the question can be answered, it must be clarified: "good" for whom? "bad" for whom?

Suppose you believe that share buybacks are good for you as a shareholder. You might believe this because you believe that you will receive more of a company's dividend dollars, if those dividend dollars are divided among fewer shares. [I will ignore for this discussion (1) companies that announce share buybacks but do not execute them, (2) companies that buy back shares when they are expensive and so destroy shareholder value, and (3) companies that buy back shares but do not retire them.]

If you believe that share buybacks are good for you, then you might also believe that more share buybacks are even better for you. If we take this to its logical conclusion, the best thing that could happen to you would be if a company bought back all of its shares but one, and you owned that one share. You would then own 100% of the company, and you would then receive 100% of the dividend dollars.

I would love to own 100% of a company that paid dividends, but I can't afford to.

Warren Buffett can afford to. but Berkshire Hathaway owns 100% of many companies. Berkshire Hathaway owns less than 100% of 37 companies. Here is a chart of those 37 and their dividend histories:

ticker david fish continuous since other
JNJ 1 - Champion
KO 1 - Champion
PG 1 - Champion
WMT 1 - Champion
COST 2 - Challenger
CVS 2 - Challenger
TMK 2 - Challenger
V 2 - Challenger
COP 3 - Contender
GD 3 - Contender
IBM 3 - Contender
GE 1977
IR 1977
GCI 1978
AXP 1979
MTB 1980
USB 1980
WPO 1980
WFC 1984
BK 1986
GSK 1987
MCO 2000
UPS 2000
KFT 2001
SNY 2003
MA 2006
NOV 2009
VIA 2010
PSX 2012
LEE 1987 to 2008
USG 1998 to 2001
LMCA 2008 to 2008
GM before bankruptcy
DG never
DTV never
DVA never
VRSK never

Of those 37:

I conclude that Warren Buffett is the world's biggest dividend investor.

So should you buy BRK? I wouldn't. BRK doesn't pay a dividend.

Should you buy all of the dividend companies that BRK owns? I wouldn't. My requirements are dividend increases for at least the past 10 consecutive years and a current dividend yield of at least 3% and many of BRK's holdings do not meet my requirements.

Should you think for yourself, and buy what makes sense to you? I'm all in favor of that.

Disclosure: I am long JNJ, KO, PG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.