Berkshire more inclined to repurchase stock than pay dividends: Buffett

[February 26, 2018]   NEW YORK (Reuters) - Warren Buffett, chairman and CEO of Berkshire Hathaway Inc <BRKa.N>, said his conglomerate, which is sitting on $116 billion of cash, is "more inclined" to repurchase stock than pay dividends as a means to use excess cash.

Speaking on CNBC television on Monday, Buffett said the corporate income tax rate cut signed into law by U.S. President Donald Trump in December is a "huge tailwind" for U.S. companies and that it is "really good for Berkshire."

Berkshire attributed roughly $29.11 billion of its net income last year to the reduction of the corporate tax rate to 21 percent from 35 percent. Many U.S. companies' reported results have been skewed by the law's impact.

In his annual letter to Berkshire shareholders on Saturday, Buffett lamented his inability to find big companies to buy and said his goal is to make "one or more huge acquisitions" of non-insurance businesses to bolster results at Berkshire.

Berkshire Hathaway CEO Warren Buffett plays bridge during the Berkshire annual meeting weekend in Omaha, Nebraska May 3, 2015. REUTERS/Rick Wilking

Buffett said finding things to buy at a "sensible purchase price" has become a challenge and is a major reason Berkshire is awash with $116 billion of low-yielding cash and government bonds - whose average maturity was 88 days as of year-end 2017.

"I am fairly confident we will find ways to deploy" Berkshire's excess cash, Buffett said on CNBC. "The best chance to deploy money is when things are going down."

(Reporting by Jennifer Ablan and Jonathan Stempel; Editing by Peter Graff and Chizu Nomiyama)

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