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Berkshire Hathaway or the S&P 500 over the Next Decade?

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Part 7
Berkshire Hathaway or the S&P 500 over the Next Decade? PART 7 OF 11

Berkshire’s Analyst Rating Indicate Marginal NTM Growth

Analyst ratings

Berkshire Hathaway’s (BRK.B) stock is priced at the high level of ~$270,000, with no dividends. As a result, the stock has seen relatively less volatility and higher investments from funds and institutions.

Only seven analysts cover the stock, with three providing a “buy” or a “strong buy” recommendations, and the remaining four issuing “holds” in August 2017. Wall Street has given a 12-month target of $280,550, implying an average growth rate of 3.86%.

Berkshire&#8217;s Analyst Rating Indicate Marginal NTM Growth

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The stock’s performance can be compared with that of broad markets (SPY) (SPX-INDEX) due to its diversified holdings. The management’s deployment theme hasn’t changed much over the years and is expected to remain the same over the next decade. This should help the company outrun the S&P 500’s returns.

Rating conglomerates

Among Berkshire’s major competitors, American International Group (AIG) has 12 of 18 analysts (67%) issuing “buy” or “strong buy” ratings. Five analysts have rated it a “hold” and one has rated it “underperform.”

Eight of the 16 analysts (50%) covering General Electric (GE) stock have given it a “buy” or “strong buy,” while six analysts have rated it a “hold” and two as “underperform.”

For Chubb (CB), 15 of the 19 analysts (~79%) covering the stock have rated it a “buy” or “strong buy,” while two analysts have given it a “hold” rating. Two analysts have also given it an “underperform” or “sell” rating.

Together, these companies make up 7.5% of the Financial Select Sector SPDR ETF (XLF).

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