Strategy Marketing Material

Dividend Strategy Guide 6.30.2026
Dividend Strategy Scorecard 6.30.2026
Dividend Strategy Factsheet 6.30.2026
Dividend Strategy Commentary 6.30.2026

What’s Different? – A “Forward Looking” Approach to Dividends…

We believe there is an epidemic for managers and funds in the dividend and dividend growth space. Countless processes begin with over simplified screens – “We screen for companies that have a dividend yield of 4%” or “We screen for companies that have raised the dividend for 10 years straight”. Our view — Simple screens of historical data may fail to capture the full dividend growth opportunity set…

Berkshire’s Process: Identify perennial dividend growers before they are fully recognized by the market using a “Forward Looking” bottom-up selection process:

Understand how a business generates free cash flow by decomposing ROE components
Model future income statement, balance sheet, and free cash flow
Measure dividend growth potential by analyzing capital structure & future payout ratio
Own tomorrow’s dividend growers trading at discounts to intrinsic value estimates

Some of our highest conviction dividend growth stories would have flunked traditional backward-looking screens at time of Berkshire’s purchase*:

Emerging tech and health care businesses
High quality financials
Contrarian energy

Our edge? Patience, discipline and the ability to capitalize on the short sightedness of others.

The Power of Compounding Dividends — Hard to Ignore…

When launching the Berkshire Dividend Growth Strategy, our research pointed to the very tangible benefits of dividend investing. This research leads us to believe a diversified portfolio of high-quality businesses consistently paying and increasing dividends can lead to attractive long-term investment results. In fact, the compounding effect of dividends is astounding. Data from 1950 through the end of 2025 — 75 years — shows dividends and dividend reinvestment have made up the large majority of the S&P 500’s total return. Over this period the S&P 500 Price Index returned roughly 33,000%, while the S&P 500 Total Return Index (dividends reinvested) returned roughly 334,000% — about ten times as much. Put differently, roughly 90% of the ending wealth came from dividends and their reinvestment. It is hard to ignore the pure compounding effect of dividends and dividend reinvesting. (Source: Bloomberg)

For illustrative purposes only. Graph assumes a 75-year time horizon. The S&P 500 index returns are provided to represent the investment environment existing during the time periods shown. For comparison purposes, the index does not include any trading costs, management fees, or other costs, and the reinvestment of dividends and other distributions is assumed. An investor cannot invest directly in an index. Dividends are not guaranteed, and may be subject to change. The return shown may not be representative of the Berkshire Dividend Growth strategy. Growth rates of dividends vary and illustration may not be indicative of future returns. Investors should carefully consider investment objectives, risks, charges and expenses. Additional information can be obtained from a financial professional and should be read carefully before investing. Dividends and yields represent past performance and there is no assurance they will continue to be paid in the future. Platform restrictions may apply. “Forward Looking” does not imply a level of skill, however the term is used to reference the way we approach our analysis of individual companies. Berkshire retains the right revise or modify portfolios and strategies if it believes such modifications would be in the best interests of its clients. Model portfolios may or may not contain any specific security at any time, and decisions to invest should not be made based on the presumed or current composition of any model portfolio.

Calculation: $1 invested at the 12/29/1950 S&P 500 close (20.43), grown by the index’s cumulative price-appreciation and total-return factors through the 12/31/2025 close (6,845.50) — 75 years, plotted monthly. Dividends reinvested: $3,342.35. Price only: $335.07. Dividend share of ending wealth = 1 − ($335.07 ÷ $3,342.35) = 90.0%. Annualized: 11.43% with dividends reinvested vs. 8.06% price only — a 3.37-percentage-point spread. Source: Bloomberg, S&P 500 daily price and total-return series (20,281 observations, 12/31/1945–8/18/2026), retrieved 8/18/2026. Index returns are not investable and reflect no fees or taxes. Past performance does not guarantee future results.