Berkshire Hathaway, led by investment icon Warren Buffett, continues to benefit significantly from its stake in Moody’s. While Buffett is known for his large holdings in companies like Coca-Cola and Apple, his investment in Moody’s, which constitutes 3.6% of Berkshire’s portfolio, highlights a strategic focus on dominant companies with reliable dividend payouts. Moody’s stock, despite a current yield of 0.85%, offers substantial returns through its consistent dividend growth.
Berkshire Hathaway acquired its initial stake in Moody’s in 2000 when the company was spun off from Dun & Bradstreet. Over the years, Berkshire has strategically sold some shares, now holding nearly 25 million, valued at approximately $11 billion. The original cost basis for this position was a mere $248 million, representing an impressive 4,400% increase in the investment’s value. However, the cumulative dividends received have far surpassed this initial investment.
Moody’s Dividend Payouts to Berkshire Hathaway
With an annual dividend of $4.12 per share and a cost basis of $10 per share, Berkshire Hathaway’s yield on cost for Moody’s stock stands at an exceptional 41.2%. In 2025 alone, Berkshire Hathaway received $93 million in dividends from its Moody’s holdings. This substantial income means Berkshire can recoup its entire initial investment in Moody’s stock within a few years, solely through dividend payments. As Moody’s management continues to increase its dividend payouts, Berkshire’s yield on cost is expected to grow even further.
Analyzing Moody’s Investment Potential
While the current yield on Moody’s stock may seem modest, the long-term dividend growth and the company’s dominant market position make it an attractive holding for value investors like those at Berkshire Hathaway. The company operates in a critical sector that is resilient to economic downturns, providing a stable foundation for consistent dividend payments. Investors considering Moody’s should evaluate its historical dividend growth and its capacity to continue increasing payouts in the future.
The strategic advantage of Moody’s lies in its essential role in financial markets, providing credit ratings and analytical services that are indispensable for investors and corporations alike. This indispensable position allows the company to generate consistent revenue streams, supporting its ability to return capital to shareholders through dividends.
Fonte: Yahoo Finance
