Although Warren Buffett’s personal conglomerate Berkshire Hathaway has eschewed paying dividends since the “bathroom dividend” of 1967, the Omaha legend’s personal management style tends to seek out recurring and growing streams of income as surely as Captain Ahab sought to stick a spear in Moby Dick. Today, the investor community learned that Berkshire Hathaway chose to convert its DirecTV holdings into 59 million shares of AT&T stock rather than cash out. This move will have AT&T pumping out $275,000 in cash dividends per day on behalf of Berkshire for an annual total of $100 million.
There are five points worth considering in response to this move:
Point #1: The seeds of this move were likely planted by Weschler or Combs, but the decision to harvest AT&T stock after this merger is a reflection of Buffett’s desire to give Berkshire some utility-like components. Berkshire owns Burlington Northern Santa Fe. It owns … Read the rest of this article!