Warren Buffett’s Berkshire Hathaway Energy
Over the years Warren Buffett’s Berkshire Hathaway Inc. has been pursuing steady profits from utilities and infrastructure deals; it has recently stepped up its game by agreeing to pay $9 billion to buy Texas’s Oncor Electric Delivery Co., the largest power transmission company in Texas.
Such infrastructure investments are viewed as well long term investments by Warren Buffet. If the purchase is sanctioned by the state and federal regulators as well as a bankruptcy judge, then Berkshire Hathaway will not only possess the control of one of the U.S largest power transmission company but it is also expected to yield 8 to 10% annually.
An investment safe from recession many investments are prone to damage from recession but the investment in utilities and infrastructure is never prone to such down falls. Oncor, the Dallas based company provides power to over 3.4 million homes and businesses via approximately 196,000 km of distribution and transmissions lines.
In just 2016 Oncor has said to have earned $431 million of profit and similar amounts over previous three years. Berkshire Hathaway Inc. is known for its profitable investments that have generated almost 10% parental profits in 2016. The master mind behind Berkshire Hathaway, Warren Buffet has been quoted saying that such investments are “recession-resistant” earnings because it is an essential service.
Investment in companies like Oncor has helped Buffett to diversify Berkshire from the usual focus on insurance and stock-picking.This diversity in investment has allowed Berkshire to own over 90 companies including Geico car insurance, BNSF railroad etc.