Though it makes most of its money from its insurance operations and other wholly owned companies, Berkshire’s large investment portfolio accounted for nearly $8 billion in revenue during 2012.
Ownership stakes like this require little action from the likes of Berkshire Hathaway or PNC Financial, instead allowing the companies to have cash available for other operations. In the case of PNC Financial Services (NYSE:PNC), the income from its investment in BlackRock more than covers the loss it experienced in its residential mortgage segment, helping the bank perform better without having to do a lot of additional work.
The Foolish bottom line
Having a sizable investment in another company does not make PNC Financial unique. However, its investment in BlackRock has been very lucrative over the past decade, and should continue to add money to the bottom line as long as BlackRock keeps humming along. It is important for PNC investors to understand the relationship between the two and keep an eye on how BlackRock is contributing to the performance of PNC Financial.
The article 1 Thing Investors Are Missing About PNC Financial originally appeared on Fool.com.
Fool contributor Robert Eberhard owns shares of Berkshire Hathaway. The Motley Fool recommends Berkshire Hathaway and BlackRock. The Motley Fool owns shares of Berkshire Hathaway and PNC Financial Services (NYSE:PNC).
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