Wildcard Sell: McLane Company
For the first nine months of 2013, the food and beverage wholesale distributor generated 26% of BRK.B’s overall revenue, but just 2.1% of the company’s earnings before taxes. While I understand the wholesale distribution business is high-volume, low-margin, it generates a worse yield (1.1% earnings before taxes margin) than Walmart’s (WMT) dividend yield of 2.4%.
Just because Walmart uses McLane (and once owned) for distribution doesn’t mean Berkshire Hathaway needs to own it. Let somebody else deal with the slim margins.
As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.