After a five-month break, Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) has resumed buying Occidental Petroleum Corp (OXY.N) shares, increasing its stake in the oil firm to about 22.2%, according to a regulatory filing on Tuesday. Between March 3 and March 7, Berkshire spent about $355 million to purchase 5.8 million Occidental shares, according to the report.
The acquisitions marked Berkshire’s first public disclosure since late September. It held a 21.4% stake at year’s conclusion. In August, Berkshire received U.S. Federal Energy Regulatory Commission permission to buy up to 50% of Occidental’s common stock.
Based on Tuesday’s closing price of $60.85, Buffett’s company now owns approximately 200.2 million Occidental shares, which are valued $12.2 billion. Following a 38% increase that Occidental declared last month, those shares would produce approximately $144 million in annual dividends.
Additionally, Berkshire holds $10 billion in Occidental preferred stock, which pays out $800 million in dividends annually, as well as warrants to purchase an additional $5 billion in common stock. At the end of January, Occidental had about 900 million issued shares.
About a year ago, Berkshire started purchasing significant amounts of the Houston-based company’s shares. After its stake surpassed 20%, Berkshire implemented the equity way of accounting for its holdings, and now reports its share of Occidental’s results with its own. Above a 20% threshold, accounting rules typically demand the equity approach, reflecting the assumption that the holder may have considerable power.
With $128.6 billion in cash and equivalents at the end of 2022, Berkshire. It intends to maintain a $30 billion buffer. In 2022, Occidental’s share price more than doubled as a result of rising oil costs following Russia’s invasion of Ukraine.
Occidental stated that it intended to increase capital spending this year and could repurchase up to $3 billion of stock, even though fourth-quarter profit was lower than analysts had anticipated.
In addition, Berkshire holds a large number of businesses, such as the BNSF railroad, Geico auto insurance, Dairy Queen, Fruit of the Loom, and other stocks like Apple Inc. (AAPL.O).