How do shareholders actually receive returns from a company that never pays dividends?

Recently, after Berkshire Hathaway’s new CEO, Greg Abel, assumed office, he not only issued a letter to shareholders but also launched a new round of share buybacks. In an interview, he revealed this decision was made in consultation with Warren Buffett. In other words, both leaders believe the company’s current market value is undervalued. Over Buffett’s 60-year stewardship of Berkshire Hathaway, the company paid dividends only once—and that amount was negligible. Since then, it has consistently refrained from dividend payouts. Abel has now reaffirmed this no-dividend policy and the ‘$1 principle’: as long as each retained dollar of profit generates at least one dollar of market value, Berkshire will retain earnings rather than distribute them. This reminds me of a prior discussion with a friend: if a company never pays dividends, what exactly are investors buying into? My answer is: 1. A company may forgo dividends—but when its stock is undervalued, it *must* conduct buybacks (though younger, growth-stage companies may legitimately defer buybacks). 2. Dividends are widely understood as returning earned profits directly to shareholders. Buybacks serve the same purpose. Many recognize that buybacks increase an investor’s proportional ownership stake—but what then? Beyond holding more shares, does it truly matter? In fact, buybacks deliver a clear benefit: the company itself acts as a real-money buyer, supporting the stock price in the open market—and thereby enhancing shareholders’ holding value. 3. What meaning does non-dividend distribution hold for a private company? Even unlisted firms have valuations; they too can conduct share buybacks. Consider ByteDance or OPPO—both maintain internal trading prices for their shares. 4. Through buybacks, companies channel value back to shareholders via rising share prices. If cash is needed, shareholders can simply sell a small portion of their holdings—though obviously, this option becomes impractical if one holds very few shares. 5. The biggest overall advantage of buybacks over dividends is tax efficiency: buybacks avoid dividend taxation, maximizing total shareholder benefit. 6. Companies that never pay dividends fall into two main categories: investment conglomerates like Berkshire Hathaway, which continuously reinvest capital into equities to drive greater capital appreciation; or high-growth enterprises like Amazon, which plow all earnings back into business expansion—also generating substantial capital gains. … Some recent key developments worth watching: 1. BYD recently unveiled its second-generation Blade Battery, delivering over 1,000 km of range and charging up to 97% in just 7–9 minutes. If real-world performance matches these claims without compromise, the race toward solid-state batteries may become largely obsolete—and NIO’s battery-swap model, along with hybrid electric vehicles, would lose much of their rationale. This is genuinely revolutionary.

A staggering RMB 397.4 billion has started moving—what signal does this send?

USD 3.57 billion equals approximately RMB 25.7 billion. Among A-share listed companies, none currently matches Berkshire Hathaway’s net profit scale. Among those that have reported results so far, CATL leads with RMB 42.3 billion in net profit—just one-sixth of Berkshire’s figure. In the A-share market, achieving RMB 10 billion in net profit already qualifies a firm as an outstanding industry leader. Of course, Berkshire’s doubled net profit does not reflect a fundamental leap in operating capability; rather, it stems primarily from a sharp rise in investment income. Its Q2 after-tax investment income totaled USD 12.684 billion—including USD 1.8 billion in after-tax realized gains—and USD 10.9 billion in unrealized gains (i.e., paper profits) on equity holdings. This surge is precisely why Berkshire has reiterated its cautionary stance. Yet regardless of whether earnings derive from operations or investments, profitability remains a true measure of capability. By contrast, Zhang CEO’s company Fenbi delivered a starkly different picture: according to its earnings preview, Fenbi’s core business contracted in the first half—and to make matters worse, its securities investments incurred a RMB 56 million loss. This outcome stands in sharp contrast to Zhang’s earlier boast—made during a university speech—that he personally earns ‘tens of millions’ per month. Running a real business and executing sound investments are profoundly difficult; by comparison, making bold claims or throwing tantrums remains all too easy. The most symbolic shift this quarter is Abel’s deployment of Buffett’s massive cash reserves: Berkshire executed ~USD 20 billion in net stock purchases, ending a streak of 14 consecutive quarters of net selling. Of this, USD 10 billion went into Google shares, and USD 4.5 billion into repurchasing its own stock—the stated rationale being management’s belief that Berkshire’s intrinsic value exceeds its current market price?

Albemarle Announces Quarterly Common Stock Dividend

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Albemarle Corporation declared a quarterly common stock dividend of $0.41 per share, payable on January 4, 2027. The board highlighted forward-looking statements regarding future dividends and potential market factors.

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