Here's How Much Berkshire Hathaway Will Earn In Dividends From Its Stake In Bank Of America Stock

Warren Buffett's Berkshire Hathaway BRK has a significant stake in Bank of America BAC stock. As of Aug. 1, Berkshire Hathaway owns about 942.43 million Bank of America stock shares. Its stake is worth approximately $36.1 billion, representing about 12.1% of Bank of America's total market capitalization and about 11.8% of Berkshire Hathaway's portfolio.

Bank of America currently pays a quarterly dividend of $0.26 per share, which equates to an annualized dividend of $1.04 per share and gives its stock a yield of about 2.7% at the time of this writing. 

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Let's find out how much Berkshire Hathaway will earn in dividends from its investment.

How To Calculate

To determine the total annual dividend income from this investment, we multiply the number of shares by the annual dividend per share:

Total Annual Dividend = Number of Shares x Annual Dividend per Share

So …

Berkshire Hathaway shares of Bank of America: 942,429,882

Bank of America’s annual dividend per share: $1.04

Total Annual Dividend = 942,429,882 x 1.04

Result: $980,127,077.28 in dividends annually

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Nearly $1 Billion Annually

Berkshire Hathaway will receive about $980.13 million annually in dividends from its investment in Bank of America, not including reinvesting those dividends. If those dividends were reinvested, the annual dividend income would grow accordingly.

The income Berkshire Hathaway receives from Bank of America aligns with Buffett’s investment philosophy, which emphasizes steady, predictable returns – this is why he loves banking and financial services stocks. Berkshire Hathaway also holds stakes in Ally Financial, American Express and Capital One Financial, to name a few.

Investors must also note that Bank of America has raised its annual dividend payment for 11 consecutive years, so Buffett and Berkshire Hathaway can count on a growing stream of dividends in the years ahead.

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