Warren Buffett hints dividend or buyback possible in Berkshire Hathaway's future
Everybody likes to read Berkshire Hathaway Inc.'s annual letter to shareholders, in large part for some insights from legendary investor Warren Buffett
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Everybody likes to read Berkshire Hathaway Inc.’s annual letter to shareholders, in large part for some insights from legendary investor Warren Buffett.
But Berkshire shareholders are particularly eager these days to hear from the Oracle of Omaha about the company’s future after his tenure.
Warren Buffett hints dividend or buyback possible in Berkshire Hathaway's futureBack to video
Mr. Buffett said he now has the right internal person to take over as chief executive the day after he dies or steps down. He also noted that this successor should be relatively young.
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That confirmed Barclays analyst Jay Gelb’s thinking that Berkshire Hathaway Energy boss Greg Abel or BNSF Railway Co. chairman Matt Rose are potential candidates.
The letter also noted that Berkshire’s valuation may not offer much upside as it approaches an unusually high 2x book value, versus roughly 1.5x currently.
But it highlighted the possibility that Berkshire could eventually start paying a dividend or buy back a significant number of shares, but not for another 10 to 20 years, and only if the company cannot reinvest in the business in a desirable fashion.
Meanwhile, Mr. Buffett expressed his willingness to partner with private equity firm 3G Capital Partners LP on another transaction similar to Burger King Worldwide Inc. or H.J. Heinz Co., as he continues to actively pursue large acquisitions and bolt-on deals to bolster organic growth.
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