Buybacks Or Dividends?

The Oracle of Omaha has spoken again: Famed investor Warren Buffett, whose company, Berkshire Hathaway, which has never paid a dividend, spoke out on his preference for buybacks over dividends. Berkshire Hathaway spent $25 billion last year repurchasing its stock, or about 5 percent of its market value. His argument for buybacks is exemplified in Apple stock. Because Apple's buybacks have reduced its shares outstanding, Berkshire's ownership of Apple has grown 10 percent since Buffett first bought Apple stock back in 2016. Berkshire now owns 10 percent more of Apple's assets and future earnings than it did five years ago. This does not account for $11 billion in Apple stock that Berkshire has sold in the interim.