In this article, we discuss the best dividend stocks according to Bill Gates.
William Henry Gates, more commonly known as Bill Gates, is an American businessman, investor, software developer, author, philanthropist, and the founder of the global tech giant, Microsoft Corporation. His fund, Bill & Melinda Gates Foundation, which is managed by Michael Larson, invests billions every year to address major issues, such as poverty and disease. The Gates Foundation was founded in 2000 as the merger of two previous charitable organizations. The fund has an endowment of over $50 billion.
Climate and clean energy have been gaining Gates’ attention in the recent past. His non-profit organization, Breakthrough Energy, which was founded in 2016, has focused on investments in the companies that aim to fight climate change.
As of Q2 2021, Bill & Melinda Gates Foundation invests heavily in industrial goods and finances, making up 30.6% and 50.8% of the portfolio, respectively. Berkshire Hathaway (NYSE:BRK.A) makes up 100% of the fund’s finance sector. The hedge fund has over $23.8 billion assets under management and the portfolio value grew by 1.14% when compared with the previous quarter.
Dividend stocks represent a sizeable portion of Gates’ 13F portfolio. The hedge fund did not make any new investments in the second quarter. Some of the notable stocks in Gates’ foundation portfolio include Berkshire Hathaway, Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF), Caterpillar Inc. (NYSE:CAT), Walmart Inc. (NYSE:WMT), and Alphabet Inc. (NASDAQ:GOOG).
However, in this article, we lay our focus on dividend-paying stocks in Bill Gates’ portfolio.
Our Methodology:
Let’s analyze our list of the best dividend stocks according to Bill Gates. The companies mentioned below are the stocks included in Bill Gates’ 13F portfolio that pay dividends.
Bill Gates
Why pay attention to hedge fund sentiment while choosing stocks?
Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by wide margins. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the S&P 500 ETF (SPY). Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Bill Gates’ 10 Dividend Stocks
10. Grupo Televisa, S.A.B. (NYSE:TV)
Bill & Melinda Gates’ Stake Value: $241,035,000
Percent of Bill & Melinda Gates’ 13F Portfolio: 1%
Number of Hedge Fund Holders: 17
Dividend Yield: 0.70%
Grupo Televisa, S.A.B. (NYSE:TV) stands tenth on our list of Bill Gates’ 10 dividend stocks. It is a Mexican multimedia and mass media company that mainly produces content in Spanish. The company has headquarters in Mexico City, Mexico.
As of Q2 2021, the Gates Foundation holds over 16.8 million shares in Grupo Televisa, S.A.B., valued at over $241 million. The company accounts for 1% of the hedge fund’s 13F portfolio. This July, Benchmark initiated its coverage on Grupo Televisa, S.A.B. with a ‘Buy’ rating and a $19 price target. The firm’s analyst appreciated the company’s 5% revenue growth in Q2, driven massively by the recovery in the advertising segment.
On May 26, the company’s board announced a quarterly dividend of $0.078 per share, yielding 0.70%. In the past year, the stock has delivered a 58.2% return to shareholders, while its year-to-date returns stood at 37.7%.
As of Q2 2021, 17 hedge funds tracked by Insider Monkey have positions in Grupo Televisa, S.A.B., up from 15 in the previous quarter. The total value of these stakes is over $1.1 billion.
Like Berkshire Hathaway, Coca-Cola FEMSA, S.A.B. de C.V., Caterpillar Inc., Walmart Inc., and Alphabet Inc., Grupo Televisa, S.A.B. is also one of the notable stocks in Bill Gates’ portfolio.
Oakmark Funds mentioned Grupo Televisa, S.A.B. in its Q2 2021 investor letter. Here is what the firm has to say:
“Grupo Televisa, a media company headquartered in Mexico and the world’s largest producer of Spanish-language content, was a top contributor for the second quarter. Grupo Televisa’s share price jumped when the company revealed that it would merge its content and media assets with Univision. In a call with shareholders, CEO of Televisa, Alfonso de Angoitia, and CEO of Univision, Wade Davis, provided details on the $4.8 billion agreement, which combines these leading media businesses in the two largest Spanish-speaking markets in the world. Overall, we think the deal makes strategic sense as streaming is the future in television, and the new company will very likely become the dominant Spanish-language streaming service. There will also be synergies from combining the two businesses, which should improve profitability versus when they were stand-alone businesses. In addition, over the long term, we believe consolidation in the media sector will continue, providing an opportunity for the new entity to partner with a larger company. Aside from the strategic merits, we believe Televisa received an attractive valuation for its content business as the $4.8B value was higher than our internal estimates. We commend management for this transaction.”
9. Ecolab Inc. (NYSE:ECL)
Bill & Melinda Gates’ Stake Value: $899,353,000
Percent of Bill & Melinda Gates’ 13F Portfolio: 3.76%
Number of Hedge Fund Holders: 48
Dividend Yield: 0.89%
Ecolab Inc. (NYSE:ECL) is an American food safety company that mainly offers services in water, hygiene, and energy technologies. The company’s products and programs are widely used by restaurants, schools, hotels, and commercial facilities. It ranks ninth on our list of Bill Gates’ 10 dividend stocks.
In Q2 2021, Gates Foundation increased its activity in Ecolab Inc. by 1% and now holds approximately 4.4 million shares in the company, valued at $899.3 million. The company represents 3.76% of the fund’s 13F portfolio.
In Q2 2021, Ecolab Inc. posted an EPS of $1.22, in-line with the analysts’ estimates. The company pays an annual dividend of $1.92 per share, yielding 0.89%. Ecolab Inc. has a track record of 36 years of dividend growth with a dividend payout ratio of 47.76%. This September, RBC Capital initiated its coverage on Ecolab Inc. with an ‘Outperform’ and a $260 price target. The stock returned 5.86% in the past year.
Of the 873 hedge funds tracked by Insider Monkey, 48 hedge funds have positions in Ecolab Inc. in Q2 2021, up from 42 in the previous quarter. These stakes are valued at $2.7 billion.
Like Berkshire Hathaway, Coca-Cola FEMSA, S.A.B. de C.V., Caterpillar Inc., Walmart Inc., and Alphabet Inc., Ecolab Inc. is gaining investors’ attention in 2021.
8. FedEx Corporation (NYSE:FDX)
Bill & Melinda Gates’ Stake Value: $445,619,000
Percent of Bill & Melinda Gates’ 13F Portfolio: 1.86%
Number of Hedge Fund Holders: 61
Dividend Yield: 1.34%
FedEx Corporation (NYSE:FDX) stands eighth on our list of Bill Gates’ 10 dividend stocks. It is an American company that focuses on transportation and other related business services.
In Q2 2021, Gates Foundation did not make any changes to its activity in FedEx Corporation. The hedge fund holds 1.4 million shares in the company, valued at $445.6 million. The company represents 1.86% of the fund’s 13F portfolio. Recently, FedEx Logistics, a subsidiary of FedEx Corporation, inaugurated new offices in South Korea to support its latest growth strategy to expand into countries with solid economies.
The company has increased its dividend by 36.84% in the past three years and currently pays an annual dividend of $3.00 per share, yielding 1.34%. This September, UBS Group set a $369 price target on FedEx Corporation, with an ‘Overweight’ rating on the shares.
As of Q2 2021, 61 hedge funds tracked by Insider Monkey have positions in FedEx Corporation, compared with 63 in the previous quarter. These stakes are valued at over $2.1 billion.
Like Berkshire Hathaway, Coca-Cola FEMSA, S.A.B. de C.V., Caterpillar Inc., Walmart Inc., and Alphabet Inc., FedEx Corporation is on investors’ radar in 2021.
Artisan Partners mentioned FedEx Corporation in its Q1 2021 investor letter. Here is what the firm has to say:
“Whatever products did make it off the line met a constrained logistics infrastructure, with commercial air capacity cut and ship cargo space at a premium. Then, in the event your dishwasher part actually made it to US waters, our ports were congested due to manpower shortages and COVID-19 protocols. When the goods were finally unloaded, it turns out trucking shortages caused a spike in ground rates! All this might be bad for your dinner parties, home décor or exercise goals, but it can be great for the middlemen. Middlemen like logistics expert FedEx.
FedEx provides global logistics services. It gets your dishwasher part on a truck, or that semiconductor chip on a plane. Surging demand for at-home deliveries during the pandemic boosted volumes and allowed management to push through price increases, keeping competitive with industry peers. The industry’s renewed pricing discipline was a welcome change, reflecting a broader commitment to earn better returns on invested capital. Despite a significant re-rating of the business over the last 12 months, FedEx remains attractive based on our margin of safety criteria.”
7. Walmart Inc. (NYSE:WMT)
Bill & Melinda Gates’ Stake Value: $1,071,852,000
Percent of Bill & Melinda Gates’ 13F Portfolio: 4.49%
Number of Hedge Fund Holders: 71
Dividend Yield: 1.58%
Walmart Inc. is an American retail company that involves in retail and wholesale businesses. The company’s segments manage supermarkets, hypermarkets, and cash and carry. It ranks seventh on our list of Bill Gates’ 10 dividend stocks.
As of Q2 2021, Gates Foundation holds over 7.6 million shares in Walmart Inc., valued at over $1.07 billion. The company accounts for 4.49% of the hedge fund’s 13F portfolio. This August, Tigress Financial lifted its price target on Walmart Inc. to $170, while keeping an ‘Overweight’ rating on the shares. The firm’s analyst appreciated the company’s strong business across all segments which paves way for significant growth in share price.
In Q2 2021, Walmart Inc. posted an EPS of $1.78, beating the estimates by $0.21. The company pays an annual dividend of $2.20 per share, yielding 1.58%.
Walmart Inc. has a track record of 45 years of consistent dividend growth.
As of Q2 2021, the number of hedge funds having stakes in Walmart Inc. grew to 71, from 58 in the previous quarter. The total value of these stakes is over $8 billion. Fisher Asset Management is the company’s leading shareholder, with 12.6 million shares.
In addition to Berkshire Hathaway, Coca-Cola FEMSA, S.A.B. de C.V., Caterpillar Inc., and Alphabet Inc., hedge funds are paying attention to Walmart Inc. in 2021.
ClearBridge Investments mentioned Walmart Inc. in its second-quarter 2021 investor letter. Here is what the firm has to say:
“The pandemic has created challenges for businesses large and small; one major challenge for large essential retailers such as ClearBridge holdings Home Depot, Walmart and Costco has been ensuring adequate staffing to meet demand under trying conditions. All three instituted enhanced pay practices during the pandemic, with raises, unplanned bonuses and other benefits helping compensate employees for their efforts in a difficult environment. In September 2020 Walmart raised wages for 165,000 employees, including a number of entry positions to $15 an hour. It followed this in February with a raise for 425,000 workers that moved its average pay above $15 an hour.”
6. Canadian National Railway Company (NYSE:CNI)
Bill & Melinda Gates’ Stake Value: $1,467,747,000
Percent of Bill & Melinda Gates’ 13F Portfolio: 6.15%
Number of Hedge Fund Holders: 40
Dividend Yield: 2.4%
Canadian National Railway Company (NYSE:CNI) stands sixth on our list of Bill Gates’ 10 dividend stocks. It is a Canadian Class 1 freight railway with a 20,000-mile network that spans Canada and mid-America.
In Q2 2021, Gates Foundation did not change its position in the Canadian National Railway Company. The hedge fund owns 13.9 million shares in the company, valued at $1.4 billion. The company accounts for 6.15% of the hedge fund’s 13F portfolio.
This September, Scotiabank lifted its price target on Canadian National Railway Company to C$160, while keeping an ‘Outperform’ rating on the shares. In Q2 2021, the company posted an EPS of C$1.49, beating the estimates by C$0.01. On July 20, the Canadian National Railway Company announced a quarterly dividend of $0.615 per share, offering an annualized yield of 2.4%. The company’s dividend payout ratio stood at 48.99%.
As of Q2 2021, the number of hedge funds tracked by Insider Monkey having stakes in Canadian National Railway Company grew to 40, compared with 36 in the previous quarter. These stakes are valued at over $5.3 billion.
5. Waste Management, Inc. (NYSE:WM)
Bill & Melinda Gates’ Stake Value: $2,610,764,000
Percent of Bill & Melinda Gates’ 13F Portfolio: 10.93%
Number of Hedge Fund Holders: 39
Dividend Yield: 1.49%
Waste Management, Inc. (NYSE:WM) is an American waste management and environmental services company based in North America. The company offers services such as garbage disposal, recycling, and dumpster collection. Waste Management, Inc. ranks fifth on our list of Bill Gates’ 10 dividend stocks.
As of Q2 2021, Waste Management, Inc. is the second-largest holding of Gates’ Foundation. The hedge fund holds over 18.6 million shares in the company, valued at over $2.6 billion. The company represents 10.93% of the hedge fund’s 13F portfolio.
In Q2 2021, Waste Management, Inc. posted an EPS of $1.27, beating the estimates by $0.08. The company’s revenue of $4.48 billion represented a 25.8% growth from the prior-year quarter. Waste Management, Inc. pays an annual dividend of $2.30 per share, yielding 1.49%. The company has a track record of 18 years of consistent dividend growth. In July, BMO Capital lifted its price target on Waste Management, Inc. to $159, while keeping an ‘Outperform’ rating on the shares. In the past year, the stock returned 34.1%.
As of Q2 2021, 39 hedge funds tracked by Insider Monkey have positions in Waste Management, Inc., up from 32 in the previous quarter. The total value of these stakes is over $3.6 billion. After Bill & Melinda Gates Foundation, Impax Asset Management holds the most shares in the company, valued at $366.6 million.
4. United Parcel Service, Inc. (NYSE:UPS)
Bill & Melinda Gates’ Stake Value: $582,688,000
Percent of Bill & Melinda Gates’ 13F Portfolio: 2.44%
Number of Hedge Fund Holders: 52
Dividend Yield: 2.24%
United Parcel Service, Inc. (NYSE:UPS) ranks fourth on our list of Bill Gates’ 10 dividend stocks. It is an American shipping and supply chain management company. The company uses a hub-and-spoke model for its network.
As of Q2 2021, Gates Foundation holds 2.8 million shares in United Parcel Service, Inc., valued at $582.6 million. The company represents 2.44% of the hedge fund’s 13F portfolio. In September, Evercore ISI initiated its coverage on United Parcel Service, Inc. with an ‘Outperform’ rating and a $225 price target. The firm’s analyst noted the company’s pricing power with a focus on capital discipline. The firm believes that United Parcel Service, Inc. can benefit from higher global supply chain urgency. In Q2 2021, the company posted an EPS of $3.06, beating the estimates by $0.25. United Parcel Service, Inc. pays an annual dividend of $4.08 per share, yielding 2.24%. The stock returned 12.02% in 2021.
The number of hedge funds having stakes in United Parcel Service, Inc. grew in the second quarter to 52, from 44 in the previous quarter. The total value of these stakes is over $2.1 billion.
ClearBridge Investments mentioned United Parcel Service, Inc. in its Q2 2021 investor letter. Here is what the firm has to say:
“We funded the shift primarily with trims in UPS following big gains in this name. UPS is a long-term holding that have been and remain core holdings. During the quarter, however, we took gains and resized the positions to reflect their current risk-reward post strong increases in the stocks.
UPS too has been a core, long-term holding. For many years its stock languished alongside fundamental performance that was both uneven and often uninspiring. Since Carol Tomé took the reins last summer and capitalized on COVID-19-related freight disruptions, UPS’s earnings have soared, and the stock has followed suit. We trimmed the position toward the end of the quarter despite continued near-term momentum and an undemanding valuation multiple. This trim reflects the longerterm risk, though hard to quantify, that Amazon may become a full-fledged competitor and meaningfully disrupt the dynamics of the industry. While not our base case, this risk cannot be disproven. We continue to be very bullish on UPS’s near-term outlook and optimistic about its longer-term outlook, while also continually looking over our shoulder to make sure Amazon is not on our heels.”
3. Caterpillar Inc. (NYSE:CAT)
Bill & Melinda Gates’ Stake Value: $2,210,415,000
Percent of Bill & Melinda Gates’ 13F Portfolio: 9.26%
Number of Hedge Fund Holders: 62
Dividend Yield: 2.28%
Caterpillar Inc. is an American company that manufactures construction and mining equipment. Along with this, the company also develops energy-related engines, industrial gas turbines, and locomotives. Caterpillar Inc. stands third on our list of Bill Gates’ 10 dividend stocks.
As of Q2 2021, Gates Foundation holds over 10 million shares in Caterpillar Inc., worth $2.2 billion. The company constitutes 9.26% of the hedge fund’s 13F portfolio. In Q2 2021, Caterpillar Inc. posted an EPS of $2.60, beating the estimates by $0.19. The company’s revenue for the quarter stood at $12.9 billion, showcasing a 29% year-over-year growth. Caterpillar Inc. pays an annual dividend of $4.44 per share, yielding 2.28%. The company has been increasing its dividend for the past 28 years. This August, Tigress Financial reiterated its ‘Buy’ rating on Caterpillar Inc., with a $270 price target. In the past year, the stock returned 22.7%.
As of Q2 2021, 62 hedge funds tracked by Insider Monkey have positions in Caterpillar Inc., up from 53 in the previous quarter. These stakes are valued at $5.26 billion.
Oakmark Funds mentioned Caterpillar Inc. in its second-quarter 2021 investor letter. Here is what the firm has to say:
“Having followed the company closely for north of a decade, Caterpillar is a name we know well. For much of its history, the operating efficiency of the company left much to be desired, but its underlying competitive position was rarely in doubt. A series of actions over the past decade (e.g., LEAN implementation, improved service mix, optimized manufacturing footprint) helped to narrow the gap between Caterpillar’s potential and its realized results, driving material margin expansion and strong share price performance. In our view, the company remains among the highest quality industrials in the market, but its underlying business is cyclical, which can translate to large swings in both performance and investor sentiment over short time periods. Our ability to focus on the long-term, sustainable earnings power of a business (rather than getting distracted by near-term fluctuations) is our most significant edge when investing in cyclical businesses. Due to the inherent volatility in Caterpillar’s end markets and operating performance, we suspect we’ll have a future opportunity to own this high-quality business at a more attractive price once the cycle turns and today’s enthusiasm wears off.”
2. Crown Castle International Corp. (REIT) (NYSE:CCI)
Bill & Melinda Gates’ Stake Value: $992,411,000
Percent of Bill & Melinda Gates’ 13F Portfolio: 4.15%
Number of Hedge Fund Holders: 42
Dividend Yield: 3.13%
Crown Castle International Corp. (REIT) (NYSE:CCI) is an American real estate investment trust that invests in shared communications infrastructure in the U.S. The company ranks second on our list of Bill Gates’ 10 dividend stocks.
As of Q2 2021, Gates Foundation holds over 5 million shares in Crown Castle International Corp. (REIT) (NYSE:CCI), valued at $992.4 million. The company represents 4.15% of the hedge fund’s 13F portfolio.
In Q2 2021, Crown Castle International Corp. (REIT) (NYSE:CCI) posted an FFO of $1.71, beating the estimates by $0.08. The company reported revenue of $1.58 billion, presenting a 9.7% year-over-year growth. Crown Castle International Corp. (REIT) (NYSE:CCI) pays an annual dividend of $5.32 per share to its shareholders, yielding 3.13%. The company has grown its dividend by 26.41% in the past three years.
This September, Morgan Stanley lifted its price target on Crown Castle International Corp. (REIT) (NYSE:CCI) to $213, while maintaining an ‘Overweight’ rating on the shares. The firm’s analyst expects the company to benefit from the growth in the domestic tower because of the growing 5G leasing cycle. Since the beginning of the year, Crown Castle International Corp. (REIT) (NYSE:CCI) gained 6.68%.
As of Q2 2021, 42 hedge funds tracked by Insider Monkey have positions in Crown Castle International Corp. (REIT) (NYSE:CCI), compared with 43 in the previous quarter. These stakes are valued at over $2 billion.
ClearBridge Investments mentioned Crown Castle International Corp. (REIT) (NYSE:CCI) in its Q2 2021 investor letter. Here is what the firm has to say:
“Turning to the U.S., U.S. communications company Crown Castle was one of the lead performers. Crown Castle is the leading independent owner and operator of wireless communications infrastructure in the U.S. with a portfolio of approximately 40,000 towers. Crown Castle performed well after the U.S. network operators announced plans to deploy 5G spectrum, with investment much larger and much sooner than the market was anticipating.”
1. Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF)
Bill & Melinda Gates’ Stake Value: $328,945,000
Percent of Bill & Melinda Gates’ 13F Portfolio: 1.37%
Number of Hedge Fund Holders: 9
Dividend Yield: 4.53%
Coca-Cola FEMSA, S.A.B. de C.V. tops our list of Bill Gates’ 10 dividend stocks. It is a Mexican multinational beverage company and a subsidiary of FEMSA, which operates the Coca-Cola bottling group.
As of Q2 2021, Gates Foundation holds 6.2 million shares in Coca-Cola FEMSA, S.A.B. de C.V., valued at nearly 329 million. The company accounts for 1.37% of the hedge fund’s 13F portfolio. In August, Goldman Sachs initiated its coverage on Coca-Cola FEMSA, S.A.B. de C.V. with a ‘Buy’ rating and a $70 price target. In Q2 2021, the company reported revenue of Ps. 47.7 billion, up 10.9% from the prior-year quarter. Coca-Cola FEMSA, S.A.B. de C.V. pays an annual dividend of $2.46 per share, yielding 4.53%. The company has increased its dividend by 23.7% in the past three years. Since the beginning of the year, Coca-Cola FEMSA, S.A.B. de C.V. delivered an 18.8% return to shareholders, while its 12-month returns stood at 27.06%.
As of Q2 2021, 9 hedge funds tracked by Insider Monkey have positions in Coca-Cola FEMSA, S.A.B. de C.V., compared with 10 in the previous quarter. The total value of these stakes is $461.9 million.
You can also take a look at Bill Gates’ Top 10 High Dividend Stocks and Will Bill Gates’ Divorce Affect These Stocks?
Follow Insider Monkey on Twitter
Suggested articles:
- 10 Stocks to Buy and Hold According to Bill Gates
- Bill Gates’ Stock Portfolio: Top 15 Picks
- Bill Gates’ Most Recent Investments
This article is originally published at Insider Monkey.
