Bill Gates’ High Conviction Dividend Growth Stocks Revisited

#2 Caterpillar Inc. (NYSE:CAT)

– Elite Investors with Long Positions (as of June 30): 30
– Aggregate Value of Elite Investors’ Holdings (as of June 30): $1.36 billion
– Percentage of Shares Owned by Elite Investors (as of June 30): 2.7%

Caterpillar is a leader in construction and mining equipment. It has grown its dividend by an average of 12.2% annually for the last decade and hasn’t cut its dividend since 1982.

Shares were down by 22.2% during the third quarter, mainly because demand for Caterpillar’s energy and mining equipment was softer than expected due to weaker commodity prices. Because of lower demand, Caterpillar missed third quarter revenue expectations by $300 million and guided lower for its full fiscal year.

The good news for Caterpillar investors is the company’s dividend yield of 4.29% is safe. Even if Caterpillar’s earnings per share decline to $3.94 next year as analysts expect, the company will have more than enough to cover its dividends. If commodity prices continue their rebound, Caterpillar shares will do well.

Bill Gates owns 11.26 million shares of Caterpillar, worth $955.14 million at the end of June. Gates’ Caterpillar shares make up 5.61% of his equity portfolio. Other elite investors who own shares of Caterpillar include Matthew Hulsizer’s Peak6 Capital Management and Paul Tudor Jones’ Tudor Investment Corp.