Berkshire Hathaway has two share classes. Which is right for you?
Berkshire Hathaway (BRK.A 1.57%) (BRK.B 1.42%) stock has proven to be one of the best-performing investments of all time. Since 1980, shares have increased more than 2,000 times in value. A $500 investment would now be worth a cool $1 million.
Want to invest in Berkshire? There are two options: A shares or B shares. The ticker symbol for the A shares is BRK.A, while the ticker symbol for the B shares is BRK.B. Which Berkshire stock should you buy?
Most people should buy this Berkshire stock
Warren Buffett decided to create a second class of Berkshire stock in 1996. At the time, the price of Berkshire's original shares had exceeded $30,000. That's a lot more than most people were prepared to spend on a single share of stock.
To make Berkshire more accessible, several independent funds were preparing vehicles that would allow investors to gain exposure to Berkshire without needing to pony up $30,000. In his 1996 shareholder letter, Buffett stressed that these funds "would have marketed themselves as Berkshire look-alikes." He worried they would use Berkshire's reputation to "entice naive small investors and would have charged these innocents high fees and commissions."
In response, Berkshire B shares were created, with a starting price of just over $1,000. A-share owners had the right to convert to B shares on a 30-for-1 basis. However, B shares carried slightly weaker voting rights, with each share having 1/200th of the voting rights of an A share. But B shares still conveyed ownership in Berkshire, and at a lower price. Now, smaller investors could buy into Berkshire without needing to invest in a separately managed fund that charged unnecessary fees.
Note that the A shares have never experienced a stock split, and now have a price above $600,000. The B shares, meanwhile, have been split to help fund acquisitions, and now have a price of around $400. Many long-term investors enjoy the novelty and commitment required to own Berkshire's A shares, but for the vast majority of investors, the B shares provide the same exposure in a more affordable, far more flexible way.
Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.
FAQs
Key Points
Is it better to buy Berkshire A or B? ›
Key Takeaways
Berkshire Hathaway Class A is the company's original stock offering, known for its stratospheric price per share. Berkshire Hathaway Class B shares, first issued in 1996, are more modestly priced and have a correspondingly modest share of equity value in the company.
Does BRK B outperform the S&P 500? ›
NYSE: BRK.
B 0.11%) CEO Warren Buffett is widely considered a legend on Wall Street, and for good reason. The conglomerate's portfolio has substantially outperformed the benchmark S&P 500 since Buffett became CEO in 1965.
What is the best Berkshire Hathaway stock? ›
Currently, Buffett's top five holdings in Berkshire Hathaway's portfolio are:
- Apple.
- Bank of America.
- American Express.
- Coca-Cola.
- Chevron.
473.10 (15.50%)
Estimated share price by June 12, 2025.
What will brk b be worth in 10 years? ›
Berkshire Hathaway stock price stood at $413.87
According to the latest long-term forecast, Berkshire Hathaway price will hit $500 by the end of 2025 and then $600 by the middle of 2028. Berkshire Hathaway will rise to $700 within the year of 2029, $800 in 2030, $900 in 2032 and $1000 in 2034.
Will brk b split again? ›
Warren Buffett doesn't like stock splits and won't ever split Berkshire Hathaway's (NYSE:BRK-A, NYSE:BRK-B).
Is it smart to invest in Berkshire Hathaway? ›
Fair Value Estimate for Berkshire Hathaway
With its 4-star rating, we believe Berkshire Hathaway's stock is undervalued compared with our long-term fair value estimate of $427 per Class B share, which is equivalent to 1.45 times our estimate of the firm's book value per share at the end of 2024 and 1.35 times for 2025.
Will BRK B ever pay dividends? ›
When is Berkshire Hathaway B dividend payment date? Berkshire Hathaway B (BRK.B) does not pay a dividend.
What is the 10 year return for Berkshire Hathaway? ›
Ten Year Stock Price Total Return for Berkshire Hathaway is calculated as follows: Last Close Price [ 409.62 ] / Adj Prior Close Price [ 126.78 ] (-) 1 (=) Total Return [ 223.1% ] Prior price dividend adjustment factor is 1.00.
For this article we scanned Warren Buffett's Q4'2023 portfolio and chose his top 12 stock picks. These were the stocks Buffett had in his portfolio heading into 2024. Some top picks of Berkshire are Apple Inc. (NASDAQ:AAPL), Coca-Cola Co (NYSE:KO) and Chevron Corp (NYSE:CVX).
What is the best way to buy Berkshire Hathaway stock? ›
Here's the simple way to buy Berkshire Hathaway stock:
- Open a brokerage account.
- Add money to the account.
- Search for Berkshire Hathaway stock within your brokerage account's platform using the ticker "BRK. B."
- Fill out the order, indicating whether you want to buy the stock in dollars or shares.
- Submit the order.
Warren Buffett is the largest holder of Berkshire Hathaway (NYSE: BRK. A)(NYSE: BRK.B) stock. He owns around 227,416 shares of Class A stock, and 276 shares of Class B stock. These stakes combine for a value of roughly $136 billion, representing a 31.6% voting interest in the company.
Why is BRK B so expensive? ›
There are lots of factors that can contribute to a high stock price. One of the biggest reasons why BRK. A is so expensive is because CEO Warren Buffett has decided against a stock split. A stock split is when a company splits its existing stock to create more shares, often resulting in a lower share price.
What is the outlook for BRK B stock? ›
Average Price Target
Based on 3 Wall Street analysts offering 12 month price targets for Berkshire Hathaway B in the last 3 months. The average price target is $470.67 with a high forecast of $490.00 and a low forecast of $450.00. The average price target represents a 16.06% change from the last price of $405.54.
What is the price target for BRK B in 2024? ›
Yearly Numbers
| 2023 | 2024 |
|---|
| High | 17.72 | 19.15 |
| Low | 16.91 | 16.91 |
| Average | 17.27 | 18.14 |
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.
Can I convert brk b to brk a? ›
This conversion privilege does not extend in the opposite direction. That is, holders of Class B shares are not able to convert them into Class A shares. Both Class A & B shareholders are entitled to attend the Berkshire Hathaway Annual Meeting which is held the first Saturday in May.
Will Berkshire Hathaway B stock go up? ›
Average Price Target
Based on 3 Wall Street analysts offering 12 month price targets for Berkshire Hathaway B in the last 3 months. The average price target is $470.67 with a high forecast of $490.00 and a low forecast of $450.00. The average price target represents a 14.90% change from the last price of $409.62.
