Berkshire's stake rises as debt-heavy OXY preserves cash

For the second consecutive quarter, Berkshire Hathaway will be getting common shares as its dividend from Occidental Petroleum, as that company preserves cash amid this year's big plunge in energy prices.

Last year, Warren Buffett did a deal in which Berkshire, in effect, loaned Occidental $10 billion to help finance its $38 billion purchase of Anadarko Petroleum after outbidding Chevron.

The loan, in the form of Berkshire's purchase of preferred shares, is supposed to pay an annual interest rate of 8% in cash. That works out to $200 million per quarter.

For the first quarter, Berkshire received 17.2 million shares then worth about $235 million, getting a premium for taking stock instead of cash.

Reuters reports Berkshire will be getting more shares as its June 30 dividend, as Occidental writes down the value of its energy properties by up to $9 billion and tries to restructure its large debt to avoid a possible default.

Bloomberg notes that Occidental has more than $23 billion in debt payments due in the next nine years and a current market value of just $16 billion.

Energy economist Ed Hirs tells Reuters that as OXY's price falls, it needs to hand over more shares to pay its dividend, increasing Berkshire's stake, which currently stands at 4%.

"There's no clear horizon to anyone getting any value other than Buffett," he said. 

As Apple hits new highs, Berkshire's stake tops 20% of its market cap 

Shares of Apple hit a record high of $372.38 this week before easing off a bit to close Friday at $353.63.

That makes Berkshire's almost 251 million shares (as of March 31) worth $88.7 billion, an increase of 151% from the $35.3 billion it paid after starting to buy in 2016.

Business Insider points out that's about 20.8% of Berkshire's market value, which it thinks is "ridiculous."

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BERKSHIRE'S TOP STOCK HOLDINGS 

Berkshire's top stock holdings by market value, based on today's closing prices. The number of shares held is as of March 31, 2020, as disclosed in the company's May 15 13F SEC filing, except for U.S. Bancorp, which is as of May 12, 2020, and Bank of New York Mellon, which is as of April 8, 2020.

The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.

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