Berkshire Hathaway (BRK-A) investment Quality Rating (AA)

(AA) | Conglomerate | Diversified Financial / Insurance / Industrial
By: Old York Financial
A Private Principal Research Report

the verdict

Old York Financial has assigned Berkshire Hathaway (BRK-A) an Operational Quality (AA) Rating. Berkshire is the world’s most powerful "Quality Aggregator." In 2025, the firm proved the resilience of its diversified model, generating a record $48.5 Billion in Operating Earnings. While Berkshire holds Sovereign-tier assets (GEICO, BNSF, Apple stake), it receives a (AA) rather than a AAA due to its deliberate "Cash Drag." With over $350 Billion in cash sitting in low-yield Treasuries as of late 2025, the consolidated ROIC is mathematically held back by the weight of its own fortress.

the old york analysis

owner earnings: the normalized surplus We ignore the "paper gains/losses" of the $300B+ equity portfolio and focus on the cash-generating power of the controlled businesses (Insurance, Rail, Energy).

• 2025 Reported Operating Earnings: $48.5 Billion

• (+) Depreciation & Amortization: ~$13.2 Billion

• (–) Maintenance CapEx: (~$16.5 Billion)

• = OLD YORK OWNER EARNINGS: $45.2 Billion

• Analyst Note: Berkshire is a "Deferred Tax" machine. By holding winners like Apple and Coca-Cola for decades, it utilizes an interest-free loan from the government (deferred taxes) to fund its "Owner Earnings" engine. This is the highest form of Principal stewardship.

growth & market dominance

• Annual Revenue (2025): ~$380 Billion.

• Operating Margin: 20.5% (TTM).

• Insurance Float: $174 Billion (Up $2B from 2024).

• Analyst Note: The "Float" is Berkshire’s secret weapon. It is $174 Billion of "Other People's Money" that costs Berkshire less than zero to hold, which they then invest for their own benefit. This is the ultimate financial monopoly.

operational efficiency

• 5-Year ROE (Avg): 11.91%

• 5-Year EPS CAGR: -10.32%

• 5-Year Price CAGR: 14.58%

• Share Change (5Y): -5.7%

• Analyst Note: The consolidated ROIC is distorted by the $358 Billion cash pile. If you strip out the cash and look only at the operating businesses (BNSF, GEICO, See’s Candies), the quality is Sovereign. However, as a consolidated entity, the "Cash Drag" is a choice that prioritizes Survival over Efficiency.

the fortress check

• Pricing Power: VARIED. GEICO and BNSF have near-absolute pricing power in their respective domains. However, its manufacturing and retail wings (Fruit of the Loom, NetJets) operate in more competitive environments.

• The "Cash Moat": UNMATCHED. Berkshire is the "Lender of Last Resort." In a market crash, while every other company is starving for liquidity, Berkshire’s $350B+ cash pile allows it to buy "Gold" at "Lead" prices. This is Antifragility in its purest form.

• Solvency: SOVEREIGN. Debt to Equity stands at 0.18x. The company is essentially "Un-leveraged" when compared to any other diversified financial institution.

final determination

Rating: Old York Quality (AA)
Classification: The Antifragile Quality Aggregator. Berkshire Hathaway is the safest business in the Registry. It receives a (AA) because its sheer size and cash-heavy strategy make it mathematically difficult to produce the high-velocity ROIC seen in capital-light monopolies like CME Group or Mastercard. For an investor, it is not a "growth play," but the ultimate "Capital Preservation" vehicle. It is the "Anchor" of a Quality Portfolio.

Disclaimer: Old York Financial operates privately as a principal and sells corporate advisory. Old York Financial is not an accountant, a financial advisor, a broker, an agent, a lawyer, or a portfolio manager. This report is for informational purposes only.