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“ Meta initiated its first-ever dividend in February 2024 to signal financial maturity, capital discipline, and confidence in its high cash-flow generation, particularly following its "year of efficiency". The move serves as a balanced capital-return strategy, complementing existing share buybacks while attracting a broader base of investors.
Key reasons for Meta's dividend initiation include:
Confidence in Earnings Sustainability: The dividend signifies that despite heavy spending on AI and metaverse infrastructure, the company remains highly profitable.
"Year of Efficiency" Maturity: Following major cost-cutting in 2023, including significant layoffs, the dividend demonstrates that Meta has shifted to a more mature, disciplined financial approach.
Balanced Capital Return: While share buybacks remain the primary method for returning capital, the dividend acts as a "nice complement" for investors and adds flexibility to capital allocation, notes CFO Susan Li according to Morningstar Canada.
Attracting Investors: The move expands the potential investor base to include those who prioritize income-generating, dividend-paying stocks, according to NASDAQ.
The initial quarterly dividend of $0.50 per share represents a relatively small portion of Meta's massive cash flow, allowing them to continue aggressive investments in AI. “

The initial quarterly dividend of $0.50 per share represents a relatively small portion of Meta's massive cash flow, allowing them to continue aggressive investments in AI.

Well, I'm convinced. Berkshire should declare an initial quarterly dividend of $0.50 per 'A' share representing a relatively small portion of Berkshire's massive cash flow, allowing them to continue aggressive investments in whatever it is they can find that meets their hurdle rate.

Satisfied?

“ Satisfied“ So, you really don’t understand why but you are throwing in the towel? Let the record reflect that two posters have reached out privately to say they understand and agree with my reasoning but, they would never admit it here. Once again I think buybacks have resumed below 480 and Brk will pay a quarterly dividend by year end. You don’t have to understand it old bud, as always, I’m looking out for my partners. ::))

For you old bud,” Alphabet (Google) initiated its first-ever dividend in April 2024 to signal its transition into a mature, cash-rich tech leader, reward long-term shareholders, and attract institutional investors. The move, accompanied by a
$
70
$
7
0
billion share buyback, highlights strong financial health and confidence in sustaining growth, particularly in AI and cloud computing, rather than a lack of investment opportunities.
Key reasons for the dividend initiative include:
Strong Cash Position: Alphabet accumulated massive liquidity, making it effective to return capital rather than hold excessive cash.
Investor Demand for Value: The move helps align with other "Magnificent Seven" peers (like Meta, Apple, and Microsoft) in attracting income-focused investors.
Maturation of the Business: After nearly 20 years as a public company, the dividend signifies that Alphabet has transitioned from just a high-growth company to a stable, profitable, mature tech leader.
Capital Allocation Strategy: The company is managing to invest heavily in AI infrastructure (with over
$
32
$
3
2
billion in capital expenditures in 2023) while simultaneously returning cash to shareholders through both dividends and buybacks.
The initial dividend was set at 20 cents per share, with a commitment to continue quarterly payments based on performance. “

Not again!

Why don’t you write a letter to Berkshire management and stop haranguing us. Sorry, we can’t help you.

I’m sure you can convince Berkshire management that paying a 50 cent dividend would signal to the markets that Berkshire is a mature and well run company, because right now it’s still perceived as a young fly by night startup.

“ I’m sure you can convince Berkshire management that paying a 50 cent dividend would signal to the markets that Berkshire is a mature and well run company, because right now it’s still perceived as a young fly by night startup.“ Oh my I love it. It took 7 years to convince Buffett to authorize a buyback at material discounts to IV, were you a message board member? If Greg is as sharp as Buffett claims it should only take another year for Greg and our bods to agree it’s the appropriate time to initiate a small quarterly dividend, watch. Thank you.

It took 7 years to convince Buffett to authorize a buyback at material discounts to IV,

I am impressed.
I didn't think Warren listened to people posting on TMF message boards, but now we find that he followed you and you eventually convinced him.

High five!!

" I am impressed.
I didn't think Warren listened to people posting on TMF message boards, but now we find that he followed you and you eventually convinced him.

High five!!"


Gotta admit, YOU, are a lot quicker than most here!:)

As you have appointed yourself as the resident expert on the subject of firms introducing dividends, I presume you have read the paper by Sanjay Sharma at MIT? Do Dividend Initiations Signal Firm Prosperity?

The abstract:

In this paper we study the significance of dividend initiations in the context of firm
performance, risk, and shareholder returns. Our evidence contradicts the principal
implication of the signaling hypothesis that increase in dividend rate is positively related
to future firm prosperity. We observe that firms report improving profitability, cash flow
and other performance measures leading up to dividend initiation, but subsequently there
is significant and sustained reversal across all these measures. We also observe that share
prices react positively to dividend initiation announcements, suggesting that they are not
anticipated by investors and are interpreted as positive news. However, over the five-year
period subsequent to dividend initiation stock returns are significantly lower than that of
the market, indicating that investors initially underestimate the deterioration in future
profitability and performance of dividend-initiating firms. An observed decline in firms’
market-to-book ratios over this period suggests that investors eventually lower their
initial expectations of firm growth and prosperity.

Berkshire's business performance will be what it will be, for better or worse, and they will introduce a regular dividend or not. But the empirical/statistical evidence suggests that introducing a regular dividend would be bad for the stock price for a long time. Which makes perfect sense, of course, as the introduction of a regular dividend is a loud declaration that a firm can no longer aspire to be seen as a "growth" firm as it can no longer allocate capital at profitable rates.

As they say, don't let the facts hit you on the way out : )

Jim

Good morning old bud, congratulations, when you are lost and confused you are still alert enough to come to me to hold your hand. ::}}

"As you have appointed yourself as the resident expert on the subject of firms introducing dividends, I presume you have read the paper by Sanjay Sharma at MIT? Do Dividend Initiations Signal Firm Prosperity?"

I'm very impressed, you went from quoting Buffett's letter written in 1999 to Sharma's paper done in 2001, in the United States it's 2026, bro, update your files.

During the past 25 years plus have you learned anything new about wall street and investing or were you all knowing 40 years ago?

You continue to insist the BODS or nvda, meta, googl, etc are ignorant and uninformed capital allocators, we disagree.

20 years ago the usual suspects here, aka, experts, assured me brk didn't need an authorized buyback because Buffett could do much better than invest a dollar in brk, how'd that work out?

I asked years ago, why do you suppose firms pay for order flow both common and options, you never explained it to me, thank you.

In the 30 plus years of following brk buying an odd lot of NYT has to be the most bizarre buy in decades. The Ochs- Sulzberger family controls NYT via the B shares. Have you foreigners heard about the Epstein files? Do you believe the NYT, headquartered in NEW YORK, did a great journalistic job covering that case? Was Epstein connected to the control people at NYT in any way? Was he ever offered a job at NYT? How unaware can brk be? brk should sell the NYT, today, into the uptick.

It's raining and windy today, hence you have access to the brilliance of my thoughts all morning, no pickleball today! As always, I'm here for you.

From Barrons,

" he S&P 500 continues to struggle with its round-number challenge, having failed to close north of the 7000 point mark since first testing that historic threshold in late October.

 
For a $62 trillion market to trade virtually sideways over the next three and a half months, while rival indexes in Europe, the UK, and Japan continue to test new highs, is unusual. But not unsurprising. The vast majority of the S&P 500’s gains since the launch of OpenAI’s ChatGPT in late November 2022, which fired the starter’s pistol on the artificial intelligence investment boom, have been powered by a handful of stocks inexorably tied to the new technology. "

SPY is liquid, Buffett knows how hard it is to beat SPY, why bother to try to beat it 12 years ago with T and T? Why not take his own advice?

Yo Jim, please name the last three significant buy and holds from Buffett that do not pay a dividend.

Thank you.

SPY is liquid, Buffett knows how hard it is to beat SPY, why bother to try to beat it 12 years ago with T and T? Why not take his own advice?

They thought they could do better.

I think there is merit to the idea that Berkshire "index" most of their equity investments going forward. Having huge, concentrated positions worked when the firm was much smaller and the greatest investors were in charge. Now Berkshire has huge amounts to invest and less talent to do it. How about a self-generated, value-weighted "index"? Could it work?

The Mars family has their five principles in huge letters inside their factories. One of them is Efficiency - "do only what we can do best". Under Greg, maybe what Berkshire can do best is operate those companies the best way possible, generate profits and float, reinvest, and invest surplus in equities in an efficient manner.

" They thought they could do better.

I think there is merit to the idea that Berkshire "index" most of their equity investments going forward. Having huge, concentrated positions worked when the firm was much smaller and the greatest investors were in charge. Now Berkshire has huge amounts to invest and less talent to do it. How about a self-generated, value-weighted "index"? Could it work?"


Yep, if team Greg does a deep dive into all our wholly owned subs you can bet they will find, issues, with 5 % or more. That's what I hope the game plan is going forward.

I seriously doubt Greg is in control yet, hence best case, we are going to hear buybacks have resumed.

375 BILLION in cash is a lot of $$, even for brkville brother Jim!::))

" They thought they could do better."

Adrianc, today I think it's fair to say we are suffering from a lack of demand, how do you see it? Thank you.

I wonder if team Greg is rethinking Friday's report, IF there is currently no shareholder friendly news to report.

As always, I'm here for free consultation to any brk director, because I'm that kind of partner and I'm always looking out for Jim, my brkville brother. :::)))

[12 years]
...
They thought they could do better.

And why wouldn't they think that? They have, in terms of value generation.
http://www.stonewellfunds.com/BerkshireAndSpyValue...
Note that the warm colours (BRK) have all done better than the cool colours (S&P index).

The usual rule of thumb is that any price rise beyond value growth is going to be transient. That's largely what SPY has been relying on to keep up with Berkshire's returns.

Jim

Adrianc, today I think it's fair to say we are suffering from a lack of demand, how do you see it? Thank you.

Berkshire is a bit above fair value.

If Greg's letter indicates business as usual I wonder if we might get a buying opportunity. But I have no idea where the share price will go, really.

I think the Intelligent Investor gets talked up a bit too much, there's a lot of outdated stuff in there, but the Mr. Market analogy still holds up.

https://en.wikipedia.org/wiki/Mr._Market

" Note that the warm colours (BRK) have all done better than the cool colours (S&P index).

The usual rule of thumb is that any price rise beyond value growth is going to be transient. That's largely what SPY has been relying on to keep up with Berkshire's returns.

Jim "


Were you a history major? Why back to 2000, we didn't hire T and T until 12 or so years later. Talk cap allocation the past 10-15 years bro, not ancient history. Who buys brkb , today, based on Buffett 25 years ago? Thank you.

Please stop writing these non-serious people, and put them in the penalty box. They're a net detractor to this board.

For the graph showing real sales per share, how are stock dividends and sales owned by BRK treated.

Aussi

I think there is merit to the idea that Berkshire "index" most of their equity investments going forward.

OMG If I wanted to put my BRK invested money into the S&P, I'd take it out of BRK and put it in the S&P!

It makes much more sense for BRK to distribute its cash by buying back its own shares than to turn itself into a mixture of BRK raisins with SP500 turds. At least we get two different investment choices this way.

R:

“OMG If I wanted to put my BRK invested money into the S&P, I'd take it out of BRK and put it in the S&P!

It makes much more sense for BRK to distribute its cash by buying back its own shares than to turn itself into a mixture of BRK raisins with SP500 turds. At least we get two different investment choices this way.”

I didn’t say the S&P. A value-weighted strategy. The kind of thing Jim keeps dreaming up, on a bigger scale. A mechanical strategy. Index in quotes.

Berkshire needs to keep a bunch in liquid investments. Some of it will always be T-bills, some fixed income, some equities. The float has to be well covered.

For the graph showing real sales per share, how are stock dividends and sales owned by BRK treated.

Sale of assets isn't counted in revenue numbers. Basic bookkeeping, except for most governments.

Jim

I didn’t say the S&P. A value-weighted strategy. The kind of thing Jim keeps dreaming up, on a bigger scale. A mechanical strategy. Index in quotes.

I'm not sure it's a thing that works well at scale. Walter Schloss apparently managed good results with a diversified portfolio, I've heard typical positions around 1-2% of portfolio, larger ones up to 3-5%. His clients beat the S&P by about 5%/year for around 40 years, but the numbers weren't in the hundreds of billions, and market valuation levels were much more dispersed back then.

It's tempting, but would it work? e.g., deploying half the capital with a shotgun approach in "reasonably good" firms, merely skipping those in industries with obvious problems for long term profitability prospects. Mathematically, merely avoiding some fraction of really big losers can give you a meaningful edge. The other half would still be handy when an elephant comes along. Berkshire needs a 40 foot tall elephant at this point, and those are scarce, so maybe head office need only be prepared for 20 foot ones?

The question is whether that would be more or less good for value per share compared to paying a relatively rich price for share buybacks. Do shareholders really want to own more of BHE? Tough questions.

Jim

For my brother Jim from an article in Barrons,

" The result: Dividend yields remain historically low, with most of the love in the market going to low- or no-dividend-paying tech stocks with a foot, or two, in the AI pool. (Nvidia pays a penny per quarter, the lowest-yielding stock in the S&P 500, at 0.02%.)"


WHY would nvda initiate that dividend? My guess, the insiders of nvda need the div income to pay the rent on their Clayton doublewides.::))


THIS, is complicated?

ucmtsu,no way.

Nvidia pays a penny per quarter, the lowest-yielding stock in the S&P 500, at 0.02%.)"

WHY would nvda initiate that dividend?


To satisfy people (and investment funds) that have a silly rule that they can only buy stocks that pay a dividend. Because as everybody knows, dividends are free money. And who doesn't like free money?

The dividend is one penny because US currency doesn't have ha'pennies.
LOL.

Actually because a $0.04 annual dividend is negligible to the people who know that dividends area non-issue.

“ To satisfy people (and investment funds) that have a silly rule that they can only buy stocks that pay a dividend. Because as everybody knows, dividends are free money. And who doesn't like free money?“. Oh my, so close to investing brilliance but Buffett and Jim don’t let you get there. Patience.

It's tempting, but would it work? e.g., deploying half the capital with a shotgun approach in "reasonably good" firms, merely skipping those in industries with obvious problems for long term profitability prospects. Mathematically, merely avoiding some fraction of really big losers can give you a meaningful edge. The other half would still be handy when an elephant comes along. Berkshire needs a 40 foot tall elephant at this point, and those are scarce, so maybe head office need only be prepared for 20 foot ones?

The question is whether that would be more or less good for value per share compared to paying a relatively rich price for share buybacks. Do shareholders really want to own more of BHE? Tough questions.


Makes sense, but sure, understand the concerns. With Buffett gone, does Berkshire have the skill set to actively invest $100s of billions in a concentrated portfolio of equities? I guess Buffett thinks they do?

" Because as everybody knows, dividends are free money. And who doesn't like free money?"



Has anyone here ever claimed a dividend is " free money"?

Why embarrass yourself?

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