What Berkshire Hathaway actually does

Berkshire Hathaway is a holding company headquartered in Omaha, Nebraska. It began as a textile manufacturer and became a conglomerate from 1965, when Warren Buffett took control. He ran it until Greg Abel took over as CEO at the start of 2026.

Berkshire is hard to describe in one line because it is a mix of businesses and investments:

  • Insurance, including GEICO and large reinsurance operations, which provide a pool of money called “float”.
  • Railways and energy, notably BNSF Railway and Berkshire Hathaway Energy.
  • A wide range of manufacturing, retail and service companies that it owns outright.
  • A large portfolio of shares in public companies, with Apple one of the most famous holdings, and a very large amount of cash.

How the business makes money

Insurance generates float that Berkshire invests, while its operating businesses generate steady profits. The company then decides where each dollar earns the best return: buying whole businesses, buying shares or repurchasing its own stock.

The dividend story

Berkshire is a famous exception among large US companies: it does not pay a dividend. Buffett argued that, as long as the company can earn good returns on the money it keeps, shareholders are better off if it is retained and reinvested.

For dividend investors, this is a useful lesson. A company can create enormous value without paying out cash, and a share price that keeps compounding is a different form of return than regular income. If you need cash, you would have to sell shares.

Class A and Class B

Berkshire has two share classes. Class A carries a very high price per share, while Class B (BRK.B) represents one fifteen-hundredth of the economic interest, so it is much cheaper and far more practical for most investors.

What to keep an eye on

  • Leadership transition. The long-time leader has handed over the CEO role, so capital allocation decisions are now in new hands.
  • Size. It is hard for a company this large to find investments that move the needle.
  • Cash pile. Large cash holdings can be a strength or a drag, depending on what it is used for.
  • Catastrophe risk. Insurance losses from major disasters can hit earnings.

Quick take

Berkshire is a long-term compounding machine, not an income stock. Treat it as the clearest example of a high-quality company where return comes entirely from price growth.