Warren Buffett's Berkshire Hathaway Likely To Get $219 Million Dividend From Apple This Quarter

Billionaire Warren Buffett-led Berkshire Hathaway's stock price recently jumped to its all-time high after the company¡¯s quarterly operating profit topped $10 billion for the first time ever.

And Berkshire Hathaway¡¯s biggest investment Apple too reported its quarterly results last week, announcing a common stock dividend of $0.24 per share that is payable on August 17 to shareholders, with the record date being August 14.

Berkshire Hathaway Likely To Get $219 Million Dividend From Apple

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So, Berkshire also stands to reap a windfall in the form of dividends from its Apple investment. Berkshire owned $177.6 billion of Apple shares at the end of June 2023. Assuming Berkshire's

Assuming Apple stake in terms of the number of shares was held unchanged at 915,560,382 (915 million shares) in the second quarter, the Buffett-led company is likely to get a mammoth dividend of $219.74 million, as per the American financial news website Benzing.

Buffett¡¯s Berkshire has been increasing its stake in the Tim Cook-led tech giant. It revealed that it had a $1 billion stake in Apple in May 2016, and by March 2023 it had boosted that stake to $151 billion. As far as Apple shares are concerned, they are up 43% this year to date and nearly 250% in the last five years. Apple has hit the $3 trillion market cap mark not once but twice (first in January 2022 then in June 2023).

Why Berkshire Doesn¡¯t Pay Dividends To Shareholders?

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While Berkshire Hathaway has been raking in millions of dollars, it doesn't pay dividends to its shareholders. The reason? Well, the short answer is that Warren Buffett believes that money can be better spent in other ways rather than paying it as dividends.

In particular, as per an Investopedia report, Buffett prefers to reinvest profits in the companies he controls to improve their efficiency, expand their reach, create new products and services, and improve existing ones.

Like many business leaders, Buffett feels that investing back into the business provides more long-term value to shareholders than paying them directly because the company¡¯s financial success rewards shareholders with higher stock values.

Also, did you know that Berkshire has paid dividends only once, in 1967, when Warren Buffett later joked that he must have been in the bathroom when the decision was made?

In fact, Buffett has said that he has three priorities for using cash that is ahead of any dividend: reinvesting in the businesses, making new acquisitions, and buying back stock when he feels that it is selling at ¡°a meaningful discount to conservatively estimated intrinsic value.

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Also Read: How A Lost iPhone Led To Warren Buffett Investing Billions In Apple

What Are Dividends & Why Do Companies Pay Them?

For the unversed, a dividend can be described as a reward that publicly-listed companies give to their shareholders for providing them with the capital to run the business. It is up to the board of directors to determine what percentage of the earnings they use to pay dividends and how much they should retain in the business.

While Apple, ITC, HCL and Tata Steel are some of the big companies that do pay dividends, Alphabet and Alibaba are among those who don¡¯t opt for the dividend route to reward their shareholders.

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