In this article, we discuss Bill Gates’ top 10 dividend stocks.
Bill & Melinda Gates Foundation was established in 2000 with the purpose to improve the well-being of humankind. The fund aims to prevent and solve social problems people are confronted with today. Since 2000, the foundation has spent over $53.8 billion on its various programs, ranging from public health to economic development. Currently, Mark Suzman is serving as the Chief Executive Officer of the firm.
In 2021, the Gates Foundation provided charitable support worth over $6.7 billion for global development, global health, and gender equality, among several other causes. Currently, the foundation is working on 41 program strategies to promote equity around the globe. In July, Bill Gates announced to donate $20 billion to the foundation as the fund plans to enhance its spending, according to a report by CNBC. In a tweet, Gates mentioned that the world is confronted with a myriad of challenges such as climate change, the war in Ukraine, and the pandemic.
The Gates Foundation announced to grow its spending from nearly $6 billion per year to $9 billion by 2026, as reported by GatesNotes.
As of the end of Q2 2022, the Bill & Melinda Gates Foundation had a 13F portfolio valued at over $17.6 billion, down from $19.7 billion in the previous quarter. The hedge fund had major investments in industrial goods and finance sectors, with other industries making up significant portions of the portfolio. In addition to this, the fund owned stakes in dividend stocks like Walmart Inc. (NYSE:WMT), Caterpillar Inc. (NASDAQ:CAT), and Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF).
Bill Gates
Our Methodology:
For this list, we chose dividend stocks from Bill & Melinda Gates Foundation’s Q2 2022 13F portfolio. The stocks are ranked according to their yields.
Bill Gates Portfolio: Top 10 Dividend Stock Picks
10. Microsoft Corporation (NASDAQ:MSFT)
Dividend Yield as of August 25: 0.90%
Bill Gates’ Stake Value: $242,607,000
Bill Gates resumed his position in Microsoft Corporation (NASDAQ:MSFT) during the third quarter of 2021 after selling a rather hefty stake worth $943.5 million in the second quarter of 2019. His hedge fund currently owns 944,620 MSFT shares, valued at over $242.6 million. The company represented 1.37% of the fund’s portfolio.
On June 14, Microsoft Corporation declared a quarterly dividend of $0.62 per share, with a dividend yield of 0.90%, as of August 25. The company is one of the most stable tech companies to pay dividends to shareholders. It has been raising its dividends consistently for the past 15 years.
In July, BMO Capital raised its price target on Microsoft Corporation to $320 with an Outperform rating on the shares, as the company’s management affirmed double-digit constant currency growth and strong booking for the next fiscal year.
Microsoft Corporation was the most popular buy among elite funds in Q2 2022, as 258 hedge funds owned stakes in the company, valued at over $56 billion. Fisher Asset Management owned the largest position in the tech giant in Q2, with stakes valued at over $7.3 billion.
In addition to Walmart Inc., Caterpillar Inc., and Coca-Cola FEMSA, S.A.B. de C.V., MSFT is another popular dividend stock in Bill Gates’ portfolio.
Carillon Tower Advisers mentioned Microsoft Corporation in its Q1 2022 investor letter. Here is what the firm has to say:
“Stock selection contributed the most while sector allocation was also positive. An underweight to communication services and an overweight to energy helped performance, while an underweight to consumer staples and an overweight to materials detracted. Stock selection was strong within healthcare and materials but was weak within information technology and industrials. Microsoft (NASDAQ:MSFT) reported positive results driven by personal computing strength, but analysts were especially positive on its growth outlook for its Azure cloud-computing services.”
9. Ecolab Inc. (NYSE:ECL)
Dividend Yield as of August 25: 1.20%
Bill Gates’ Stake Value: $671,382,000
Ecolab Inc. (NYSE:ECL) is a Minnesota-based food safety company that provides services related to water treatment, purification, cleaning, and hygiene. The company holds one of the strongest dividend policies, offering dividends to shareholders on its common stock for 85 consecutive years. In addition to this, it has been raising its payouts consistently for the past 30 years. The company currently pays a quarterly dividend of $0.51 per share, with a dividend yield of 1.20%, as of August 25.
The Gates Foundation started investing in Ecolab Inc. during the third quarter, purchasing shares worth nearly $283 million. In Q2 2022, the hedge fund owned over 4.3 million ECL shares, worth over $671.3 million. The company was the fifth-largest holding of the hedge fund, accounting for 3.79% of its portfolio.
Highlighting the company’s positive earnings in its recent quarter, Deutsche Bank set a $180 price target on Ecolab Inc., with a Buy rating on the shares.
As of the close of Q2 2022, 43 hedge funds in Insider Monkey’s database owned stakes in Ecolab Inc., down from 47 in the previous quarter. The collective value of these stakes is over $1.7 billion.
Baron Funds mentioned Ecolab Inc. in its Q1 2022 investor letter. Here is what the firm has to say:
“Lastly, we added to our position in the leading water, hygiene and infection prevention company, Ecolab Inc., as the stock sold off on concerns over rising raw material costs. We believe the sell-off is overdone as Ecolab’s strong competitive positioning and proven pricing power would enable it to offset the rising costs (though with a lag). We think that the company will continue benefiting from the secular growth trends towards sustainability, while still having a long runway for growth with only an 8% share of its estimated $147 billion addressable market.”
8. Waste Management, Inc. (NYSE:WM)
Dividend Yield as of August 25: 1.50%
Bill Gates’ Stake Value: $2,850,579,000
Waste Management, Inc. (NYSE:WM) is an environmental services company that mainly does business in comprehensive waste. The company has been a part of the Bill & Melinda Gates Foundation since the third quarter of 2012 when the hedge fund purchased roughly $600 million worth of stake in the company. In Q2 2022, the hedge fund owned a WM stake worth over $2.8 billion, which accounted for 16.12% of its 13F portfolio.
On August 23, Waste Management, Inc. announced a quarterly dividend of $0.65 per share, in line with its previous dividend. The company has been raising its dividends consistently for the past 15 years and has a 5-year dividend CAGR of about 6%. As of August 25, the stock’s dividend yield came in at 1.50%.
In July, BMO Capital maintained its Market Perform rating on Waste Management, Inc., highlighting the company’s favorable price and volume outlook.
As per Insider Monkey’s Q2 2022 database, 37 hedge funds in Insider Monkey’s database owned stakes in Waste Management, Inc., compared with 40 a quarter earlier. These stakes are collectively valued at over $3.7 billion. In addition to Bill Gates, Ric Dillon, Cliff Asness, and Ian Simm were some of the company’s prominent stakeholders in Q2.
Diamond Hill Capital mentioned Waste Management, Inc. in its Q1 2022 investor letter. Here is what the firm has to say:
“We also initiated a position in Waste Management (NYSE:WM), one of the largest providers of waste collection services in the US. We believe it is a high-quality business with ownership of key landfill assets that provide pricing power over the long term. Its stock was trading at a discount to our estimate of intrinsic value due to short-term market concerns over an increase in growth investments—we expect these investments to be value-creating over the long term.”
7. Walmart Inc. (NYSE:WMT)
Dividend Yield as of August 25: 1.66%
Bill Gates’ Stake Value: $367,276,000
Walmart Inc. remained popular among elite funds in Q2 2022, according to Insider Monkey’s data. 67 hedge funds owned stakes in the company in Q2, growing from 60 in the previous quarter. These stakes hold a collective value of over $3.78 billion.
At the end of Q2 2022, Walmart Inc. accounted for 2.07% of the Bill & Melinda Gates Foundation’s portfolio. The hedge fund has been investing in the company for over a decade now. It owned over 3 million WMT shares in Q2, valued at over $367.2 million. The company was the sixth-largest holding of the Gates Foundation.
Walmart Inc. has been raising its dividends consistently since 1974. It currently pays a dividend of $0.56 per share, with a dividend yield of 1.66%, as of August 25. Its payout ratio is also safe at 47.8%.
In August, Morgan Stanley raised its price target on Walmart Inc. to $150, with an Overweight rating on the shares, appreciating the company’s top-line core momentum.
6. Weber Inc. (NYSE:WEBR)
Dividend Yield as of August 25: 1.80%
Bill Gates’ Stake Value: $18,025,000
Weber Inc. (NYSE:WEBR) manufactures charcoal, gas, and electric outdoor grills with related accessories. The Gates Foundation initiated its position during the third quarter of 2021, buying shares worth nearly $44 million. In Q2 2022, the hedge fund owned 2.5 million WEBR shares, worth over $18 million. The company represented 0.1% of the hedge fund’s portfolio.
Weber Inc. started paying dividends to shareholders in November 2021. It offers a quarterly payout of $0.43 per share and has a dividend yield of 1.80%, as of August 25. It can be a good addition to dividend portfolios in addition to other stable stocks like Walmart Inc., Caterpillar Inc., and Coca-Cola FEMSA, S.A.B. de C.V..
At the end of Q2 2022, 4 hedge funds tracked by Insider Monkey owned stakes in Weber Inc., up from 2 a quarter earlier. These stakes hold a collective value of over $18.6 million. Citadel Investment Group was one of the company’s leading stakeholders in Q2.
5. Canadian National Railway Company (NYSE:CNI)
Dividend Yield as of August 25: 1.82%
Bill Gates’ Stake Value: $1,156,038,000
Canadian National Railway Company (NYSE:CNI) is a Montreal-based freight railway, controlling over 31,000 km of track in Canada and North America. The company has been a part of the Gates Foundation since 2012. In Q2 2022, the hedge fund sold roughly $600 million worth of stake in the company, reducing its position by 22%. The fund’s total stake in the company amounted to over $1.15 billion in Q2, which represented 6.53% of its 13F portfolio.
Canadian National Railway Company has raised its dividends 22 years in a row at an average annual rate of 18%. It currently pays a quarterly dividend of C$0.7325 per share, with a dividend yield of 1.82%, as of August 25.
In July, National Bank raised its price target on Canadian National Railway Company to C$166 and maintained a Sector Perform rating on the shares.
At the end of Q2 2022, 41 hedge funds in Insider Monkey’s database owned stakes in Canadian National Railway Company, growing from 38 in the previous quarter. These stakes are valued at over $7.4 billion. Among these funds, TCI Fund Management was the company’s leading stakeholder in Q2.
4. FedEx Corporation (NYSE:FDX)
Dividend Yield as of August 25: 2.03%
Bill Gates’ Stake Value: $121,145,000
FedEx Corporation (NYSE:FDX) is an American transport company that mainly focuses on e-commerce and related services. The company has been raising its dividends consistently for the past 21 years and has a 5-year dividend CAGR of 13.4%. It currently pays a quarterly dividend of $1.15 per share, with a dividend yield of 2.03%, as of August 25.
Bill Gates started investing in FedEx Corporation in the third quarter of 2012, purchasing shares worth roughly $256 million. In Q2 2022, the hedge fund owned 534,362 FDX shares, with a total value of over $121 million. The company represented 0.68% of the fund’s portfolio.
In July, BofA raised its price target on FedEx Corporation to $287 with a Buy rating on the shares, acknowledging the company’s improvement goals.
The number of hedge funds tracked by Insider Monkey owning stakes in FedEx Corporation grew to 63 in Q2 2022, from 52 in the previous quarter. The collective value of these stakes is over $1.75 billion. Ken Griffin and Israel Englander were the company’s most prominent stakeholders in Q2.
3. Caterpillar Inc. (NASDAQ:CAT)
Dividend Yield as of August 25: 2.44%
Bill Gates’ Stake Value: $1,314,532,000
Caterpillar Inc. is an American multinational construction and machinery equipment company. The company was a part of 45 hedge fund portfolios in Q2 2022, compared with 54 in the previous quarter. The stakes owned by these funds hold a value of over $3.25 billion.
In August, Credit Suisse appreciated the strong pricing power of Caterpillar Inc. and sees strong demand across its all segments. In view of this, the firm raised its price target on the stock to $236 with an Outperform rating on the shares.
Caterpillar Inc. was the third largest holding of the Bill & Melinda Gates Foundation in Q2, owning stakes worth over $1.3 billion. The company represented 7.43% of the hedge fund’s 13F portfolio.
On June 8, Caterpillar Inc. declared a quarterly dividend of $1.20 per share, up 8% from its previous dividend. This was the company’s 28th consecutive year of dividend growth. In addition to this, it has been paying dividends to shareholders for the past 89 years. As of August 25, the stock’s dividend yield came in at 2.44%.
Diamond Hill Capital mentioned Caterpillar Inc. in its Q1 2022 investor letter. Here is what the firm has to say:
“We also initiated a position in Caterpillar (NYSE:CAT), one of the world’s leading manufacturers of construction and mining equipment. It’s a company we know well, as we have owned it in our large cap portfolio for quite some time. Recent share price weakness provided an opportunity for us to add it to our large cap concentrated portfolio at an attractive discount to our estimate of intrinsic value. We believe Caterpillar stands to benefit from increased capital investment supported by a healthier/recovering end market environment, particularly in construction and mining.”
2. United Parcel Service, Inc. (NYSE:UPS)
Dividend Yield as of August 25: 2.98%
Bill Gates’ Stake Value: $135,205,000
United Parcel Service, Inc. (NYSE:UPS) is a Georgia-based multinational shipping & receiving and supply chain management company. The company has been raising its dividends consistently for the past 12 years. It pays a quarterly dividend of $1.52 per share, with a dividend yield of 2.98%, as recorded on August 25.
Bill Gates initiated his position in United Parcel Service, Inc. in the fourth quarter of 2014, purchasing shares worth over $503 million. In Q2 2022, the hedge fund owned 740,689 UPS shares, valued at over $135.2 million. The company represented 0.76% of the hedge fund’s portfolio.
In July, Wells Fargo appreciated the quarterly earnings of United Parcel Service, Inc. despite a challenging volume environment. In view of this, the firm set a $223 price target on the stock while maintaining an Overweight rating on the shares.
As of the close of Q2 2022, 38 hedge funds in Insider Monkey’s database owned stakes in United Parcel Service, Inc., down from 50 in the previous quarter. These stakes hold a collective value of over $613 million.
Mayar Capital mentioned United Parcel Service, Inc. in its Q2 2022 investor letter. Here is what the firm has to say:
“UPS has been a beneficiary of the pandemic-related shift to e-commerce. Revenues increased 15% in the year, with strong leverage in the business boosting operating profit by al- most 67%. Management is focusing on a ‘Better not Bigger’ strategy for the business and divested the UPS Freight business early in the year. Mean- while, the company is expected to increase distributions to shareholders in 2022, from both dividends and share buybacks.”
1. Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF)
Dividend Yield as of August 25: 4.05%
Bill Gates’ Stake Value: $343,550,000
A Mexican multinational beverage company, Coca-Cola FEMSA, S.A.B. de C.V. pays a quarterly dividend of Ps 0.67875 per share, with a dividend yield of 4.05%.
Bill & Melinda Gates Foundation has been investing in the company since 2012. In Q2 2022, the hedge fund did not change its position in the company, owning stakes worth over $343.5 million. The company accounted for 1.94% of the hedge fund’s portfolio.
In July, Barclays lifted its price target on Coca-Cola FEMSA, S.A.B. de C.V. to $65 with an Overweight rating on the shares, appreciating the company’s continued volume momentum in Q2.
As of the close of Q2 2022, 6 hedge funds in Insider Monkey’s database owned stakes in Coca-Cola FEMSA, S.A.B. de C.V., up from 5 in the previous quarter. The collective value of these stakes is over $460.8 million.
You can also take a look at 10 High Dividend Stocks to Shore Up Your Cash Position Before Recession Begins and 10 Dividend Stocks to Buy According to Steve Cohen’s Point72 Asset Management
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This article is originally published at Insider Monkey.
