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. (NYSE:CAT) 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. (NYSE:CAT) 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. (NYSE:CAT), worth $2.2 billion. The company constitutes 9.26% of the hedge fund’s 13F portfolio. In Q2 2021, Caterpillar Inc. (NYSE:CAT) 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. (NYSE:CAT) 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. (NYSE:CAT), 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. (NYSE:CAT), up from 53 in the previous quarter. These stakes are valued at $5.26 billion.
Oakmark Funds mentioned Caterpillar Inc. (NYSE:CAT) 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.”
