Class A shares generally have more voting power and higher priority for dividends, while Class B shares are common shares with no preferential treatment. Class C shares can refer to shares given to employees or alternate share classes available to public investors, with varying restrictions and voting rights.
Fair Value Estimate for Berkshire Hathaway
With its 3-star rating, we believe Berkshire's stock is fairly valued compared with our long-term fair value estimate of $467 per Class B share, equivalent to 1.44 times our estimate for its book value per share at the end of 2025 and 1.40 times that estimate for 2026.
Better performance track record
More importantly, though, Berkshire has handily beaten the S&P 500 over the long term. Between 1965 (when Buffett gained control of the company) and 2023, Berkshire's compounded average annual return was 19.8% compared to only 10.2% for the S&P 500.
Just know that a $250 investment is no longer even possible. The company's B shares -- its cheapest share class -- now trade at around $400. If you can meet that minimum investment, putting the money into Berkshire still makes a ton of long-term sense.
Despite being a large, mature, and stable company, Berkshire Hathaway does not pay dividends to its investors.
Top Warren Buffett Stocks
Coca-Cola (KO), 400 million. Kraft Heinz (KHC), 325.6 million. Apple (AAPL), 300 million. Occidental Petroleum (OXY), 264.3 million.
Warren Buffett has long recommended a low-fee S&P 500 tracker fund to amateur investors. Chamath Palihapitiya says it's become riskier as a few stocks now have an outsize pull on the index. Buffett mostly steers clear of tech names, but Apple has been his No. 1 stock for years.
Although there's no telling where BRK. B shares could be 20, 30 or 40 years from now, it's possible to get a rough idea of the 10-year horizon. By some forecasts, shares of Berkshire could trade as high as $900 by 2034.
The abovementioned argument, coupled with BRK-B trading at the higher end of its historical range, led the author to the conclusion that BRK-B is overvalued relative to the market.
Overall, BRK-B ranks 7th on our list of best safe stocks to buy according to analysts. While we acknowledge the potential of BRK-B to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame.
Berkshire Hathaway has not announced any plans for BRK. B to have a stock split again.
Some might want to wait until Berkshire's valuation is more attractive to buy the stock. However, I think Berkshire Hathaway remains an excellent pick for long-term investors. Bank of America is an advertising partner of Motley Fool Money.
Class B mutual fund shares are seen to be a good investment if investors have less cash and a longer time horizon. To avoid the exit fee, an investor should typically remain in the fund for five to eight years.
Coca-Cola: $24.3 billion (8.2% of invested assets)
Consumer staples goliath Coca-Cola (KO -1.04%) is the stock Buffett's company has held the longest (since 1988), and it's also considered a forever holding by the Oracle of Omaha.
According to a recent filing with the US Securities and Exchange Commission, the investment company run by Wall Street legend Warren Buffett now holds no stock in Snowflake, which achieved a $120 billion post-IPO valuation in 2020.
Berkshire Hathaway B (IT:1BRK) does not pay a dividend.
Yes, a 10% annual return is realistic. There are several investment vehicles that have historically generated 10% annual returns: stocks, REITs, real estate, peer-to-peer lending, and more.
Exchange-traded funds (ETFs) that hold Berkshire Hathaway offer a way to tap into Buffett's investment empire while maintaining diversification. Berkshire Hathaway stock is a holding in many funds, including low-cost ETFs offered by investment management company Vanguard.
The top three individual shareholders are Warren Buffett, Susan Buffett, and Ronald Olson. The company's top three institutional shareholders are Vanguard, BlackRock, and State Street.
Berkshire Hathaway has consistently outperformed the S&P 500 since 1965. The Vanguard S&P 500 ETF has generated bigger gains over the past two decades when factoring in reinvested dividends. Berkshire Hathaway faces more unpredictable headwinds than the latter.