Bill Gates’ 4 Highest Conviction Dividend Growth Stocks

Bill Gates is currently the richest person in the world. He has amassed a $79 billion fortune. There are 2 other people in the $70 billion+ club; Warren Buffett & Carlos ‘Slim’ Helu.

Bill Gates made his fortune by founding Microsoft Corporation (NASDAQ:MSFT). Since retiring, he has divested himself of Microsoft Corporation and now owns a concentrated portfolio.

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A full 57% of Bill Gates’ portfolio is invested in just one stock… Berkshire Hathaway (BRK.B). Bill Gates clearly has much respect for the investing skills of Warren Buffett.

The next 4 largest holdings in Bill Gates’ portfolio all pay dividends. Together, these 4 holdings account for over 21% of his portfolio.   These 4 stocks are all lower-risk ‘blue chip’ stocks with strong competitive advantages.

This article takes a deeper look at Bill Gates’ 4 largest dividend holdings.

#4 Caterpillar Inc. (NYSE:CAT)

Caterpillar Inc. (NYSE:CAT) currently makes up 4.8% of Bill Gates’ portfolio. Caterpillar is the industry leader in construction equipment manufacturing.

The company has a long history of rewarding shareholders with rising dividends. The company has not reduced its dividend payments since 1982.

Caterpillar is a member of the Dividend Achievers index, which includes only stock with 10+ years of consecutive dividend increases. Click this link to see download a list of all 238 Dividend Achievers.

Caterpillar Inc. (NYSE:CAT) has grown its dividend payments at 12.2% a year over the last decade. The company is highly cyclical, however. Right now, Caterpillar is in a ‘down’ phase. When commodity prices fall, Caterpillar sees its earnings decline. The company generates a sizeable portion of its revenue from energy and mining equipment sales. Declines in construction also hurt Caterpillar stock.

With the recent declines in energy and mineral prices, Caterpillar’s earnings have temporarily fallen. The company’s expected earnings-per-share in 2015 are forecasted to be down 46% versus all time earnings-per-share highs set in 2012. This makes now a good time to buy Caterpillar stock at a discount.

Caterpillar Inc. (NYSE:CAT) is currently trading for its highest dividend yield since the Great Recession of 2007 to 2009. Now is the best time in the last 6 years to buy Caterpillar stock based on its dividend yield. Caterpillar currently has a 4% dividend yield.