Most of Berkshire Hathaway's Earnings Don't Come From Its Stock Portfolio. Here's Where They Do Come From.

Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB) owns arguably the most famous stock portfolio in the world -- the one Warren Buffett spent decades assembling. It was worth about $324 billion when the second quarter ended, and about two-thirds of it sits in just five companies, including Apple, Coca-Cola, and American Express.

But for all the attention those holdings get, they aren't the main source of Berkshire's earnings. The conglomerate also owns businesses outright, including a major railroad, utilities, GEICO and other insurers, and dozens of manufacturers, service companies, and retailers.

Those wholly owned operations, not the stock picks, produce most of what Berkshire earns. And lately, the gap has been widening.

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A $48 billion engine

Berkshire's preferred measure of its business, operating earnings, strips out the swings in the value of its stock holdings. Operating earnings for the second quarter totaled about $13 billion, 16% higher than a year earlier.

Add up the four reported quarters through June, and operating earnings come to about $48 billion.

The biggest contributor over that stretch was Berkshire's manufacturing, service and retailing group, at about $14.7 billion after taxes. Insurance investment income (the interest and dividends Berkshire's insurers earn on the money they hold) came to about $12 billion. Insurance underwriting added about $7.4 billion, railroad BNSF about $5.7 billion, and Berkshire Hathaway Energy about $4.2 billion. An "other" bucket, mostly interest on the parent company's own cash and currency swings on its non-dollar debt, contributed about $4.1 billion.

And the engine is growing again. Operating earnings dipped about 6% in 2025, led by softer insurance underwriting, but they rebounded 17% year over year through this year's first six months. Much of that jump, though, came from a swing to currency gains on Berkshire's non-dollar debt. The underlying businesses grew, too.

Berkshire keeps adding to its manufacturing, service and retailing group, too. It bought OxyChem, a chemicals maker, for about $9.4 billion in January, and it closed an $8.5 billion deal (including debt) for homebuilder Taylor Morrison in late July. Both deals could push that group's earnings higher.

What does the stock portfolio actually pay?

The portfolio does contribute to those operating earnings -- through the dividends Berkshire collects on its shares. But the contribution is smaller than I suspect many investors assume, and it has been shrinking.

Berkshire's insurers, which hold the bulk of the portfolio, collected $5.5 billion of dividends in 2023. Last year, the figure was about $5.1 billion, the second straight annual decline. Through the first six months of 2026, dividend income was essentially flat year over year at about $2.5 billion.

Add up the same four quarters through June, and dividends come to about $5.1 billion, before taxes. Set that against $48 billion of after-tax operating earnings, and the famous portfolio's cash contribution works out to about a tenth of what the company earns, at most.

Interest and other investment income, meanwhile, came to about $9.6 billion over those four quarters, thanks largely to the more than $210 billion in cash and U.S. Treasury bills Berkshire's insurers held at midyear.

In other words, the cash pile pays Berkshire nearly twice as much as the stock portfolio does.

Operating earnings are the number to watch

Of course, the portfolio still swings Berkshire's reported results around. Accounting rules require the company to run changes in the value of its stockholdings through its income statement each quarter, whether it sells a share or not.

Over the four quarters through June, investment gains (both those marks and gains on shares Berkshire actually sold) added about $42 billion and helped swell reported net earnings to about $86 billion.

Berkshire itself plays down those swings. The amount of investment gains or losses in any given quarter, its latest earnings release says, "is usually meaningless."

At about $507 per Class B share as of this writing, Berkshire's market value is about $1.1 trillion. Against $86 billion of reported earnings, the stock may look cheap, at about 13 times earnings.

But $42 billion of investment gains are baked into that figure. Against the $48 billion of operating earnings, the price comes to about 23 times earnings -- a fuller price, and arguably a fair one for a business this durable.

Ultimately, the stock portfolio is the most visible part of Berkshire, but it isn't the most important one. The businesses the company owns outright generate most of the earnings, those earnings are growing again, and they can keep climbing even in a stretch when the famous stock picks go nowhere. That's the real case for owning the stock at today's price, in my opinion.

American Express is an advertising partner of Motley Fool Money. Daniel Sparks and his clients have positions in Apple and Berkshire Hathaway. The Motley Fool has positions in and recommends American Express, Apple, and Berkshire Hathaway. The Motley Fool has a disclosure policy.