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Berkshire Stock Is Cheap. It’s One of Barron’s Top Stock Picks, Too.

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Warren Buffett
Drew Angerer/Getty Images

This article is an excerpt from Barron’s 10 favorite stocks for 2022, published on Dec. 17. To see the full list, click here.

When Berkshire Hathaway CEO Warren Buffett made his initial equity gift to the Bill & Melinda Gates Foundation in 2006, he wrote that Berkshire’s stock is an “ideal asset to underpin the long-term well-being of a foundation.”

“The company has a multitude of diversified and powerful streams of earnings, Gibraltar-like financial strength, and a deeply imbedded culture of acting in the best interests of shareholders.”

That’s still the case 15 years later.

The Class A stock (ticker: BRK.A), at about $454,550, is up 31% this year. Buffett refuses to pay a dividend, but Berkshire has ramped up its stock buybacks and should repurchase more than 4% of its shares this year. It trades for 1.35 times our estimate of year-end book value, a cheap level, given that its businesses are probably worth much more than their carrying values.

Berkshire’s stake in Apple (AAPL) alone is worth $160 billion, following the iPhone maker’s recent run-up.

Company / Ticker
Recent Price
YTD Change
2021E EPS
2022E EPS
2022E P/E
Dividend Yield
Market Value (bil)
Amazon.com / AMZN
$3,377.42
4%
$41.11
$51.37
65.7
None
$1,713
AT&T / T
23.71
-18
3.38
3.17
7.5
8.8%
169
Berkshire Hathaway / BRK.A
454,550.00
31
17,466.30
18,928.50
24.0
None
673
General Motors / GM
58.39
40
6.73
6.93
8.4
None
85
Hertz Global Holdings / HTZ
21.01
-22*
4.02
2.55
8.2
None
10
IBM / IBM
125.93
5
10.05
11.04
11.4
5.2
113
Johnson & Johnson / JNJ
173.01
10
9.83
10.38
16.7
2.5
455
Nordstrom / JWN**
20.05
-36
1.27
1.99
10.1
None
3
Royal Dutch Shell / RDS.B
42.82
27
4.86
6.19
6.9
3.9
166
Visa / V***
214.37
-2
5.91A
7.04
30.5
0.7
467

*Since July 1. **Estimates for Jan. 2022 and Jan. 2023 fiscal year ends. ***Sept. fiscal year end. E=estimate. A=actual.

Source: FactSet

Write to Andrew Bary at andrew.bary@barrons.com

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