Berkshire Hathaway, which agreed to buy Duracell battery for $4.7 billion Thursday, likes receiving dividends but not paying them out, says Elizabeth MacDonald, senior stocks editor at
Fox Business Network.
Berkshire hasn't provided a dividend since 1967. But its top four holdings do so generously: American Express, Coca-Cola, IBM and Wells Fargo.
Warren Buffett lauded Coke in his 2010 shareholders letter www.berkshirehathaway.com/letters/2010ltr.pdf for increasing its dividend every year since Berkshire purchased its shares in 1994. "Other companies we hold are likely to increase their dividends as well," Buffett wrote.
Meanwhile, Berkshire shareholders have voted down shareholder proposals to implement a dividend payment. "But these are non-binding proposals that Berkshire and Buffett could ignore," MacDonald noted.
To be sure, she noted that Buffett has hinted that dividends may come in the future. "There will come a time when we cannot intelligently use 100 percent of the capital we've developed internally," he said at the last shareholders meeting.
"Whatever is in the best interests of the shareholders will be done at this point."
Analysts were impressed with Buffett's deal to purchase Duracell from Procter & Gamble. Berkshire will use its P&G shares to pay for the acquisition, allowing it to exit most if not all of its stake in the somewhat-troubled company without incurring the taxes it would owe on selling the shares for cash.
"It's a brilliant financial deal," Buffett biographer Andrew Kilpatrick told
Bloomberg. "He's getting a tremendous deal, tax-wise."
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