BRK.B vs. BLK: Which Financial Conglomerate Is the Smarter Pick Now?

The Federal Reserve has kept interest rates steady at 4.25%–4.5% since December 2024. There’s speculation about two possible rate cuts in 2025. Meanwhile, equity markets continue to perform satisfactorily due to economic growth. Against this backdrop, let’s find out which of these two financial conglomerates — Berkshire Hathaway Inc. (BRK.B) and BlackRock Inc. BLK — has an edge.

Factors to Consider for BRK.B

Berkshire Hathaway is a diversified conglomerate with ownership in more than 90 subsidiaries across diverse industries, including insurance and consumer products. This helps to minimize concentration risk. Of these, insurance is the most prominent, contributing approximately one-fourth of the company’s total revenues. 

Alongside insurance, Berkshire generates substantial earnings from energy, transportation, manufacturing and consumer goods. These businesses provide steady cash flows, lower product concentration and create resilience against sector-specific volatility.

Led by Warren Buffett, Berkshire has consistently followed a disciplined investment philosophy, targeting undervalued assets with strong long-term potential. Key investments in firms such as Coca-Cola, American Express, Apple, Bank of America, Chevron and Occidental Petroleum reflect this strategy. A major portion of Berkshire’s capital is allocated to short-term U.S. Treasury bills and other government-backed instruments exceeding $100 billion or about 90%. 

A significant advantage for Berkshire is its growing insurance float—the funds held between collecting premiums and paying claims—which has expanded from about $114 billion in 2017 to $174 billion by the second quarter of 2025. This float provides Berkshire with low-cost capital that it invests in high-quality, durable assets 

With its robust financial position, Berkshire also pursues disciplined share repurchases, reinforcing shareholder value and showcasing its strong capital management strategy.

With over $100 billion in cash reserves, minimal debt and a strong credit profile, Berkshire Hathaway’s balance sheet continues to reflect exceptional resilience and financial strength. Berkshire also pursues disciplined share repurchases, reinforcing shareholder value and showcasing its strong capital management strategy.

Berkshire’s return on equity of 7% lags the industry average of 7.7% but the company has improved its return over time. BRK.B shares have gained 9% year to date, outperforming the industry’s increase of 8.2%.

Factors to Consider for BLK

BlackRock is a leading investment management firm with $11.6 trillion of assets under management (AUM) as of Dec. 31, 2024.  It also offers technology services, through its proprietary technology platform Aladdin. The technology platform generates stable, high-margin recurring revenues and provides diversification away from traditional asset-based fees.

BLK is also expanding in rapidly growing private markets platform which is rapidly emerging as one of the most lucrative sectors in global finance. BlackRock aims to raise $400 billion for private markets by 2030.

Inorganic expansion strategy, aimed at boosting presence in lucrative alternatives and private equity assets, alongside product diversification, will support top-line and AUM growth.

BlackRock’s capital distribution activities look impressive. The company hikes dividends annually, and it has increased at a 15%+ CAGR since inception in 2003. Also, the company expects to repurchase at least $375 million worth of shares per quarter in 2025.

Its return on equity of 15.5% is better than the industry average of 9.9%. BLK shares have gained 9.6% year to date and outperformed the industry.

Estimates for BRK.B and BLK

The Zacks Consensus Estimate for BRK.B’s 2025 revenues implies a year-over-year increase of 4.8% while that for EPS implies a year-over-year decrease of 7.6%.  EPS estimates have moved 1.1% south over the past 30 days. 

The Zacks Consensus Estimate for BLK’s  2025 revenues implies a year-over-year increase of 15% while that for EPS implies a year-over-year decrease of 9.1%.  EPS estimates have moved 0.5% north over the past 30 days.

Are BRK.B and BLK Shares Expensive?

Berkshire is trading at a price-to-book multiple of 1.59, above its median of 1.41X over the last five years. BLK’s price-to-book multiple sits at 3.53, above its median of 3.0X over the last five years.

Conclusion

Holding shares of Berkshire Hathaway adds dynamism to shareholders’ portfolios. It is led by Warren Buffett, who has been creating tremendous value for shareholders over nearly six decades with his unique skills. However, all eyes are now on how the behemoth fares when Greg Abel succeeds Warren Buffett as CEO of Berkshire, starting Jan. 1, 2026. Warren Buffett will continue to be the company's executive chairman.

BlackRock is well-poised for growth thanks to its solid AUM balance, product diversification, expansion through buyouts, enhancement of private markets capabilities and active equity business focus.

On the basis of return on equity, which reflects a company’s efficiency in generating profit from shareholders' equity as well as gives a clear picture of the company's financial health, BLK scores higher than BRK.B. 
 
Though these stocks carry a Zacks Rank #3 (Hold) each, BLK has an edge over BRK.B. 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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This article originally published on Zacks Investment Research (zacks.com).

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