When considering which single stock to own for decades, I would opt for a company with a durable and diversified revenue base, a robust earnings growth trajectory, and conservative capital management.
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Warren Buffett's company, Berkshire Hathaway (BRK.A 1.34%) (BRK.B 1.26%), appears to fit the bill. Often referred to as a conglomerate, Berkshire operates much like an asset management company, owning and allocating capital across a broad portfolio of operating businesses and investments.
However, the company differentiates itself from traditional asset management companies as it is funded primarily by low-cost capital, including insurance float (premiums held before claims are paid) and retained operating earnings of its wholly owned operating businesses, rather than client capital or recurring investor subscriptions. The company invests this capital in public stocks, private firms, and targeted acquisitions, remaining invested for the long term, without the pressures of redemptions (selling or exiting portfolio holdings), fundraising, or meeting short-term mandates.
Besides a robust business model, here are a few other reasons why Berkshire is an attractive buy-and-hold investment for the long-term investor.
Strong balance sheet and impressive earnings
Berkshire Hathaway exited the third quarter of fiscal 2025 (ending Sep. 30, 2025) with cash and short-term U.S. Treasuries worth $381.7 billion, up $31.7 billion on a sequential basis. With the largest cash position in U.S. corporate history, Berkshire enjoys exceptional financial flexibility to invest billions of dollars in attractive undervalued opportunities during market stress, without increasing debt or diluting equity.
NYSE: BRK.B
Key Data Points
In the third quarter, Berkshire’s operating earnings rose 33.6% year-over-year to $13.5 billion. The operating earnings highlight the durability and health of the wholly-owned operating businesses, which are cash-generating businesses in areas of economic activity such as insurance, railroads, manufacturing, utilities, and services.
Berkshire’s net earnings also come from multiple segments, including insurance underwriting, insurance investment income, Burlington Northern Santa Fe (BNSF, the largest railroad service in North America), Berkshire Hathaway Energy Company (BHE), as well as manufacturing, service, and retail. With a broad and diversified earnings base, the company’s performance is not overtly dependent on a single industry, macro factor, or news-driven event.
Robust operating businesses
The primary insurance and reinsurance business remains a key driver of growth for Berkshire. In the third quarter, insurance underwriting generated after-tax earnings of $2.36 billion, up around $1.6 billion on a year-over-year basis.
Profitable underwriting enables the company to grow its insurance float at little or no cost, which is then redeployed in investment vehicles to earn insurance investment income. However, in the third quarter, after-tax insurance investment income declined $483 million year-over-year, mainly due to lower interest rates and capital distributions to Berkshire in the fourth quarter of 2024. However, this quarterly softness is not permanent, and insurance investment income is expected to recover as interest rates stabilize or begin to rise over time. With a float of $176 billion, the company can generate substantial income from insurance investment returns in the coming quarters.
Besides insurance, BNSF Railway has created an “efficient scale” economic moat, where huge capital investment and regulatory hurdles have created high barriers to entry, protecting the largest railroad service in North America from competitive pressures. Berkshire Hathaway Energy has also solidified its position by generating clean power at energy costs far lower than the U.S. average.
Capital allocation
Berkshire exited the third quarter with retained earnings of nearly $744 billion, up nearly 6.9% on a year-over-year basis. Despite the enormous amount of liquidity, the company has remained disciplined in its share repurchases, executing no buybacks in the third quarter. Instead, funds are used for investments and reinvestments in lucrative opportunities.
Valuation
Berkshire currently trades at 16.1 times trailing earnings and 1.6 times book value, which seems justified. On the other hand, traditional asset management companies such as Blackstone (BX 1.39%), BlackRock (BLK 0.45%), and KKR (KKR 1.03%) are more expensive, trading at a price-to-earnings multiple of 44.1x, 27.7x , and 56.2x, respectively.
Hence, considering its unmatched cash position, diversified revenue streams, and disciplined capital allocation, all of which are available at a reasonable multiple, Berkshire Hathaway can be the one stock you can buy and hold for several years.
