Berkshire Hathaway, the conglomerate led by Warren Buffett, receives substantial annual dividends from its investment in Moody’s, the credit rating agency. In 2025, Berkshire Hathaway collected $93 million in dividends from its Moody’s stock, a significant return that allows the company to recoup its initial investment every few years.
Berkshire Hathaway initially acquired shares of Moody’s in 2000 when the company was spun off from Dun & Bradstreet. While the exact initial holding was 48 million shares, Berkshire has since sold portions of its stake and currently owns nearly 25 million shares, valued at approximately $11 billion. The original cost basis for this investment was $248 million, representing a remarkable 4,400% increase in the stock’s value. However, the cumulative dividends received have generated even greater returns.
Currently, Moody’s dividend yield stands at 0.85% based on its stock price. However, a more telling metric for long-term investors like Buffett is the yield on cost basis. With an annual dividend of $4.12 per share and a cost basis of $10 per share, Moody’s offers Berkshire Hathaway a yield on cost of 41.2%. This means the dividend income alone effectively repays Berkshire’s initial investment in Moody’s stock in a matter of years.
Moody’s Dividend Growth
As Moody’s management continues to increase its dividend payouts, the yield on cost basis for Berkshire Hathaway is expected to rise further. This strategy aligns with Buffett’s preference for companies with dominant market positions that can consistently generate and grow dividend income, even during economic downturns. Moody’s, as a leading credit rating agency, fits this profile by providing essential services that are relatively resilient to economic fluctuations.
The consistent dividend growth from Moody’s underscores the long-term value investing approach favored by Berkshire Hathaway. While the current yield might appear modest, the historical performance and projected increases highlight the power of compounding dividends over time. This strategy allows the company to generate substantial passive income from its equity holdings, reinforcing its financial strength.
Our Analysis
Berkshire Hathaway’s substantial dividend income from Moody’s exemplifies the benefits of a patient, value-oriented investment strategy. The company’s ability to generate significant returns through dividends, far exceeding its initial cost basis, highlights the power of long-term holding and dividend growth. This approach not only provides consistent income but also demonstrates the potential for capital appreciation in fundamentally strong companies.
Fonte: Nasdaq
