Are Analysts Right About Berkshire's Valuation and the Possibility of a Dividend?

Speculation as to whether Berkshire Hathaway (BRK-B, BRK-A) will begin dividend payments to shareholders has risen again, but this time with fresh, convincing arguments in favor of it. Barron's issued a report on Berkshire here suggesting that the company may pay a dividend as early as this year.Analysts at Stifel Nikolaus & Co. reiterated their “sell” rating in response, noting reserve requirements in Berkshire's insurance business were favorable through the September period. While Stifel analysts continue to miss the “big picture” on Berkshire's undervaluation, namely its earnings power and ultimately profitable short puts positions we wrote about here, the insurance business is the key reason why Buffett will refrain from issuing a dividend.... Read more