In recent years, the argument against dual-class stock investment has heated up considerably. Some feel they should be outlawed completely.

In March 2019, I argued that the problem isn’t the share structure but the people running these companies. The share structure doesn’t stand in the way of market-beating returns in the hands of reasonable management and board. 

Recently, the Financial Times reported that large institutional investors such as pension funds are unhappy with S&P Global’s (NYSE:SPGI) decision to allow companies with unequal voting structures to belong to the S&P Composite 1500.

“S&P’s change reverses a five-year-old policy of barring new companies with dual-class shares from indices,” the Financial Times wrote in May. “S&P initially banned dual-class companies in 2017 after Snap, the owner of the Snapchat app, went public with no voting rights, sparking an uproar from pension funds. S&P’s prohibition did not force out existing constituents such as Alphabet, Berkshire Hathaway and Meta.”

The Council of Institutional Investors represents pension funds. They’re very unhappy. 

Boo hoo! 

Maybe if they spent less time worrying about share structures and more time voting against bad practices by reprobate companies, the dual-class structure wouldn’t keep surfacing as a so-called problem.

This is all about more power for institutions, not the investors whose funds they invest. Anything that gives institutions more power is bad for retail investors. 

Approximately 68 companies in the S&P Composite 1500 have dual-class share structures. A further 102 that aren’t in the index would be under the ban’s reversal.

Here are three stocks worth owning from the 170 choices.

Berkshire Hathaway (BRK.A, BRK.B)

Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B) is one of the seven dual-class stocks I recommended in March 2019. It’s up 75% in the 53 months since, 20 percentage points better than the S&P Composite 1500.  

I usually only include the stock symbol for Berkshire’s Class B shares in my articles because who can afford the Class A shares at $533,109 apiece? Warren Buffett can.

Berkshire first introduced Class B shares in 1996. The introduction of Class B shares allowed investors to acquire full shares of its stock rather than tiny slivers through unit trusts and mutual funds.  

“As I have told you before, we made this sale [of Class B] in response to the threatened creation of unit trusts that would have marketed themselves as Berkshire look-alikes. In the process, they would have used our past, and definitely non-repeatable, record to entice naïve small investors and would have charged these innocents high fees and commissions,” Buffett wrote in the company’s 1996 annual report.

At the time of the Class B shares issuance, they cost buyers 1/30th the price of a Class A share. After a 50-for-1 split in 2010, one Class B share became worth 1/1500th of a single Class A. As for voting rights, a Class A share gets one vote per share, while a Class B share is 1/200th of a share. 

Have you ever heard someone complain about the disparity between the two share classes? No. Neither have I.

Dick’s Sporting Goods (DKS)

Dick’s Sporting Goods (NYSE:DKS) has more than tripled in the 53 months since March 2019, rewarding long-term investors in the process.

Dick’s has two classes of shares: Common and Class B. The common has one vote per share compared to 10 votes per Class B. Edward Stack, the company’s CEO from 1984 to 2021, holds nearly 50% of the votes. His dad, Dick Stack, founded the company in 1948.

When Edward Stack stepped out of the CEO role in 2021, he became Executive Chairman, and Lauren Hobart, President at the time, took over. She joined Dick’s in 2011.

There are several reasons why I like Dick’s stock. A big one is that it hired a woman to be its CEO. Even better that it went internally instead of reaching for a big name outside the organization. Another is that the sporting goods industry is a consistent grower. It won’t blow you away with its growth but rarely goes into an extended funk or cyclical retreat. 

Analysts are mixed about its stock, with 13 rating it as Overweight or Buy out of 27 covering it. DKS is expected to earn $13.50 a share in 2023. It trades at a reasonable 9.7x its 2023 earnings. 

If you’ve owned DKS for the past few years, I doubt you care that Edward Stack has nearly 50% of the votes. You probably welcome the stability it brings.

Lennar (LEN)

Lennar (NYSE:LEN, NYSE:LEN.B) isn’t one of the seven dual-class stocks to buy that I recommended in March 2019. However, Berkshire recently bought some of the homebuilder’s shares, so clearly, it doesn’t have a problem with dual-class share structures. It’s up 147% in the 53 months since March 2019, nearly 3x better than the S&P Composite 1500.  

Before you get excited that Buffett has put his stamp of approval on Lennar and the other two home builder stocks bought by Berkshire in the second quarter, it’s important to note that the purchases are thought to have been made by one of his two investment managers: Todd Combs or Ted Weschler. However, even if the Oracle of Omaha didn’t pull the trigger, he likely would have stopped any purchases if he felt they weren’t a good idea. 

Lennar has two classes of stock: Class A and Class B. Class A comes with one vote; Class B has 10. The Class B trade at a 10% discount to Class A. The discount has gotten more pronounced in 2023, so consider LEN.B instead. 

In March 2014, I recommended Lennar stock. In July, I did the same, arguing that it’s one of the largest homebuilders in America for a reason.   

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.