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Companies Can't Be Like Berkshire When It Comes to Dividends

Buffett has the discipline to guide capital back into his firm rather than use it for dividend payouts, but most companies are better off distributing excess cash to shareholders, says Morningstar's Josh Peters.

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Jeremy Glaser: For Morningstar, I'm Jeremy Glaser. In Warren Buffett’s annual letter to shareholders, he explained why Berkshire doesn't pay a dividend and why he doesn't expect it to pay dividend anytime soon. But is this advice good for other companies, as well? I'm here with Josh Peters. He is the editor of Morningstar DividendInvestor. He is also the director of equity-income strategies at Morningstar.

Josh, thanks for joining me.

Jeremy Glaser does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.