In this article, we discuss top dividend stocks to buy according to billionaire Bill Gates.
Founded in 2000, Bill & Melinda Gates Foundation Trust is one of America’s largest private charitable organizations. The fund has expanded its reach over the years by developing philanthropic institutions in low-income countries and areas around the world. Since its inception, the fund has spent over $53.8 billion in grants, donations, and other humanitarian activities. As of January 2022, the firm’s funding commitments to fight Covid-19 surpassed $2 billion. Mark Suzman is currently serving as the Chief Executive Officer of the firm.
In one of her interviews with Bloomberg in September, Melinda Gates mentioned that the onset of the pandemic has hampered the progress of various issues, especially poverty and climate change. She further emphasized her commitment to this global platform to fight social inequities prevalent in the world today. Both Bill and Melinda Gates have shown their allegiance to the fund by funding work in over 144 countries. In addition to this, the Gates Foundation provided charitable support worth over $6.7 billion in 2021, covering various areas including global development, health, and gender equality. In July, Bill Gates announced to increase in the fund’s payout by 50% over pre-pandemic levels, to approximately $9 billion by 2026, up from $6 billion in pre-Covid times, as reported by Wall Street Journal.
Bill & Melinda Gates Foundation Trust has roughly $34 billion in assets under management as of Q3 2022, compared with $17.6 billion in the preceding quarter. The fund’s investments during the quarter are within the tech, services, finance, and industrial goods sectors. Berkshire Hathaway Inc. (NYSE:BRK-B), Microsoft Corporation (NASDAQ:MSFT), and Coupang, Inc. (NYSE:CPNG) are some of the firm’s major holdings in the third quarter. In this article, we will discuss some of the best dividend stocks in Bill Gates’ portfolio.
Our Methodology:
For this list, we selected dividend stocks from Bill & Melinda Gates Foundation’s Q3 2022 13F portfolio. The stocks are ranked according to their stake value in Bill Gates’ portfolio.
Bill Gates’ Top 10 Dividend Stocks
10. FedEx Corporation (NYSE:FDX)
Bill Gates’ Stake Value: $227,807,000
Dividend Yield as of November 17: 2.71%
FedEx Corporation (NYSE:FDX) is an American transport company that specializes in e-commerce and related business services. During Q3 2022, The Gates Foundation purchased additional one million shares in the company, boosting its position by 188%. The fund’s total FDX stake amounted to over $227.8 million. The company represented 2.71% of Bill Gates’ portfolio.
In addition to Berkshire Hathaway Inc., Microsoft Corporation, and Coupang, Inc., FedEx Corporation is another prominent holding of Bill Gates in Q3 2022.
FedEx Corporation currently pays a quarterly dividend of $1.15 per share for a dividend yield of 2.71%, as of November 17. The company is one of the top dividend stocks on our list as it has been raising its dividends consistently for the past 21 years.
In October, Jefferies initiated its coverage on FedEx Corporation with a Hold rating and a $170 price target, highlighting the company’s recent quarterly earnings.
The number of hedge funds tracked by Insider Monkey owning stakes in FedEx Corporation stood at 63 in Q2 2022, growing from 52 in the previous quarter. These stakes hold a consolidated value of over $1.75 billion.
Artisan Partners mentioned FedEx Corporation in its Q3 2022 investor letter. Here is what the firm has to say:
“Earnings results at FedEx Corporation (NYSE:FDX), a global shipping and logistics firm, disappointed due to slowing volumes—principally in its Express segment, which resulted in negative operating leverage—in addition to continued cost pressures. The Express business has been affected by trade disruptions in Asia from China’s COVID lockdowns, as well as the mix of global consumer spending trending back toward services and away from goods—a normalization of pandemic-driven consumer behavior. A key question for investors is how much of this demand slowdown is idiosyncratic and therefore less likely to repeat and how much is the start of a possible cyclical slowdown. To counter these headwinds, FedEx is looking to achieve cost reductions while it continues to implement multi-year structural cost reduction initiatives focused on technology investments and efficiency gains. Given a mixed track record and the recent earnings miss, there is a high degree of skepticism embedded in the current stock price as it sells for less than 8X our estimate of normalized earnings. While operating results can be choppy, the longer term business economics are highly favorable given the global shipping industry’s consolidated structure and massive barriers to entry that afford operators with pricing power to counter cost inflation and earn respectable returns on capital over the business cycle.”
9. Waste Connections, Inc. (NYSE:WCN)
Bill Gates’ Stake Value: $290,418,000
Dividend Yield as of November 17: 0.74%
Waste Connections, Inc. (NYSE:WCN) is a Texas-based waste services company that specializes in the collection, transfer, disposal, and recycling services. On November 2, the company announced a 10.9% hike in its quarterly dividend to $0.255 per share. This was the company’s sixth consecutive year of dividend growth. The stock’s dividend yield on November 17 came in at 0.74%.
Waste Connections, Inc. is one of the latest acquisitions of The Gates Foundation. The hedge fund started building its position in the company with over 2 million shares, worth over $290.4 million. The company represented 0.85% of Bill Gates’ portfolio.
In October, Jefferies initiated its coverage of Waste Connections, Inc. with a Buy rating and a $165 price target. The firm called the company best-in-class amongst its waste peers with above-average pricing growth and margins due to its wide exposure.
Waste Connections, Inc. was a part of 33 hedge fund portfolios in Q2 2022, compared with 34 in the previous quarter, according to Insider Monkey’s database. The stakes owned by these hedge funds hold a total value of nearly $1.2 billion.
Carillon Tower Advisers mentioned Waste Connections, Inc. in its Q3 2022 investor letter. Here is what the firm has to say:
“Waste Connections, Inc. (NYSE:WCN) is a solid waste company providing non-hazardous waste collection, transfer and disposal services, and recycling services in mostly exclusive and secondary markets throughout the United States and Canada. The company has operated well throughout the recent period of rising cost pressures by largely succeeding in passing through the majority of the elevated costs to customers. Investors also have appreciated the defensive characteristics inherent in the firm’s business model as we potentially approach a period of economic uncertainty.”
8. Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF)
Bill Gates’ Stake Value: $362,877,000
Dividend Yield as of November 17: 4.00%
Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) is a Mexican multinational beverage company. Barclays appreciated the company’s performance despite headwinds and also highlighted its improving fundamentals. Given this, the firm raised its price target on the stock in October to $72 with an Overweight rating on the shares.
Bill & Melinda Gates Foundation has been investing in Coca-Cola FEMSA, S.A.B. de C.V. since the third quarter of 2012, when it bought the company’s shares worth over $801.6 million. During Q3 2022, the hedge fund did not change its position in the company and its total KOF stake amounted to over $362.8 million. The company represented 1.06% of Bill Gates’ portfolio.
Coca-Cola FEMSA, S.A.B. de C.V. currently pays a dividend of Ps 0.67875 per share, which is paid to shareholders in two installments. As of November 17, the stock has a dividend yield of 4.00%.
As of the close of Q2 2022, 9 hedge funds in Insider Monkey’s database owned stakes in Coca-Cola FEMSA, S.A.B. de C.V., up from 6 in the previous quarter. These stakes have a total value of over $462 million.
7. Walmart Inc. (NYSE:WMT)
Bill Gates’ Stake Value: $391,805,000
Dividend Yield as of November 17: 1.51%
An American multinational retail company, Walmart Inc. (NYSE:WMT) has been a part of The Gates Foundation since the third quarter of 2012. The firm started its position in the company with shares worth over $782.5 million. At the end of Q3 2022, the hedge fund owned over 3 million WMT shares, valued at over $391.8 million. The company made up 1.15% of Bill Gates’ portfolio.
Walmart Inc. is one of the top dividend stocks on our list as it has been raising its dividends consistently for the past 49 years. The company pays a quarterly dividend of $0.56 per share for a dividend yield of 1.51%, as recorded on November 17.
Morgan Stanley provided a positive outlook on Walmart Inc. due to the company’s recent quarterly earnings and growth across all segments. In November, the firm lifted its price target on the stock to $164 with an Overweight rating on the shares.
The number of hedge funds owning stakes in Walmart Inc. stood at 67 in Q2 2022, growing from 60 in the previous quarter, as per Insider Monkey’s data. These stakes are collectively worth over $3.78 billion.
Leaven Partners mentioned Walmart Inc. in its Q3 2022 investor letter. Here is what the firm has to say:
“In our last quarterly letter, I briefly mentioned that the consensus estimates for corporate profits appeared to be a bit too sanguine. I referenced a Reuters article that reported, as of June 17, Wall Street expected S&P 500 earnings to grow by 9.6% in 2022, which was up from 8.8% in April and from 8.4% in January. That tune began to change at the end of July and accelerated in August and September, as major players, such as Walmart (NYSE:WMT), has recently issued profit warnings and/or have withdrawn guidance. In response, Wall Street has altered its outlook: lowering third-quarter profit growth to 4.6%[2] from 7.2% in early August and slashing full-year profit growth to 4.5%.”
6. Ecolab Inc. (NYSE:ECL)
Bill Gates’ Stake Value: $702,809,000
Dividend Yield as of November 17: 1.38%
Ecolab Inc. (NYSE:ECL) is a Minnesota-based chemicals company that specializes in the purification and cleaning of water in a wide variety of applications. In November, BMO Capital maintained a Market Perform rating on the stock, expecting the company to show strong performance in the upcoming quarters.
During Q3 2022, The Gates Foundation increased its position in Ecolab Inc. by 12%. The fund currently owns over 4.8 million shares in the company, worth $702.8 million. The company accounted for 2.06% of Bill Gates’ portfolio and is one of his most important holdings alongside Berkshire Hathaway Inc., Microsoft Corporation, and Coupang, Inc..
Ecolab Inc. holds one of the strongest dividend policies. The company has been paying dividends on its common stock for the past 85 years and has raised its payouts for 30 years in a row. It currently offers a quarterly dividend of $0.51 per share and has a dividend yield of 1.38%, as of November 17.
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.
ClearBridge Investments mentioned Ecolab Inc. in its Q3 2022 investor letter. Here is what the firm has to say:
“We have focused our valuation discipline to reduce exposure to higher-multiple stocks most at risk of multiple compression in the current environment. Along these lines, while we remain constructive on the high returns on invested capital Ecolab Inc. (NYSE:ECL) earns in its core business, over the years its diversification has diluted this segment’s importance, and we feel less comfortable defending the position at current valuations.”
5. Caterpillar Inc. (NASDAQ:CAT)
Bill Gates’ Stake Value: $1,206,581,000
Dividend Yield as of November 17: 2.10%
Caterpillar Inc. (NASDAQ:CAT) is an American construction machinery and equipment company that specializes in diesel and natural gas engines. The Gates Foundation opened its position in the company with shares worth over $882.8 million during the third quarter of 2012. At the end of Q3 2022, the hedge fund owned over 7.3 million CAT shares worth $1.2 billion. The company represented 3.54% of Bill Gates’ portfolio.
Following the company’s Q3 earnings and its improving fundamentals, Citigroup raised its price target on Caterpillar Inc. in October to $235 with a Neutral rating on the shares.
Caterpillar Inc. is one of the top dividend stocks on our list as it has been raising its dividends consistently for the past 28 years. The company offers $1.20 per share in quarterly dividends with a dividend yield of 2.10%, as of November 17.
As of the end of the June quarter of 2022, 45 hedge funds tracked by Insider Monkey owned stakes in Caterpillar Inc., compared with 54 in the previous quarter. These stakes are collectively valued at over $3.25 billion.
Diamond Hill Capital mentioned Caterpillar Inc. in its Q1 2022 investor letter. Here is what the firm had 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.”
4. Deere & Company (NYSE:DE)
Bill Gates’ Stake Value: $1,308,079,000
Dividend Yield as of November 17: 1.11%
Deere & Company is an American manufacturing company that specializes in agricultural machinery and other related products. The company has a very long track record of dividends, paying regular dividends to shareholders since 1990. Moreover, it has raised its dividends at a CAGR of 11% in the past five years. Currently, the company pays a per share dividend of $1.13 every quarter, with a dividend yield of 1.11%, as of November 17.
During Q3 2022, The Gates Foundation purchased additional 3 million shares in the company, increasing its position by 336%. The fund’s total DE stake amounted to over $1.3 billion at the end of Q3. The company made up 3.84% of Bill Gates’ portfolio.
In November, DA Davidson raised its price target on Deere & Company to $445 with a Buy rating on the shares, ahead of the company’s Q4 earnings. The firm presented a positive outlook on US farm income per acre.
As of the close of Q2 2022, 54 hedge funds in Insider Monkey’s database owned stakes in Deere & Company, with a total value of over $1.58 billion.
ClearBridge Investments mentioned Deere & Company in its Q3 2022 investor letter. Here is what the firm has to say:
“For example, we believe that farm equipment manufacturer Deere & Company (NYSE:DE) continues to benefit from both a strong farm economy and product innovations that directly benefit farmers’ productivity while also reducing their environmental footprint. The company has also demonstrated excellent execution, highlighted by capturing market share and maintaining margins despite dealing with a labor strike and elevated supply chain costs.”
3. Waste Management, Inc. (NYSE:WM)
Bill Gates’ Stake Value: $5,644,894,000
Dividend Yield as of November 17: 1.65%
Waste Management, Inc. (NYSE:WM) is a Texas-based company that deals in comprehensive waste and also offers environmental services to its consumers. In October, Jefferies upgraded the stock to Buy while lifting its price target to $191. The firm mentioned that the company will benefit from the favorable pricing environment in the industry and has also shown margin improvement over the quarters.
In the past five years, Waste Management, Inc. has raised its dividends at a CAGR of 6%. Overall, the company has grown its dividends for 15 years in a row. It currently pays a quarterly dividend of $0.65 per share and has a dividend yield of 1.65%, as of November 17.
The Gates Foundation has been investing in Waste Management, Inc. since the third quarter of 2012. During Q3 2022, the hedge fund increased its position in the company by 90%, which takes its total WM stake to over $5.6 billion. The company represented 16.6% of Bill Gates’ portfolio.
According to Insider Monkey’s data, 37 hedge funds invested in Waste Management, Inc. in Q2 2022, compared with 40 in the previous quarter. These investments hold a collective value of over $3.7 billion.
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.”
2. Canadian National Railway Company (NYSE:CNI)
Bill Gates’ Stake Value: $5,920,745,000
Dividend Yield as of November 17: 1.74%
Canadian National Railway Company (NYSE:CNI) is a Canada-based transport company. It holds a 22-year track record of consistent dividend growth. Currently, the company pays a quarterly dividend of C$0.7325 per share and has a dividend yield of 1.74%, as recorded on November 17.
Canadian National Railway Company was the third-largest holding of The Gates Foundation at the end of Q3 2022. The hedge fund owned over 54.8 million CNI shares, worth roughly $6 billion, raising its position in the company by 434%. The company represented 17.41% of the firm’s 13F portfolio.
In October, BMO Capital lifted its price target on Canadian National Railway Company to C$180 with an Outperform rating on the shares.
As of the end of Q2 2022, 42 hedge funds tracked by Insider Monkey reported owning stakes in Canadian National Railway Company, up from 41 a quarter earlier. The total value of those stakes was over $7 billion, compared with $8.1 billion worth of CNI shares owned by hedge funds in the preceding quarter.
1. Microsoft Corporation (NASDAQ:MSFT)
Bill Gates’ Stake Value: $9,144,742,000
Dividend Yield as of November 17: 1.12%
An American multinational tech giant, Microsoft Corporation was the largest holding of The Gates Foundation at the end of Q3 2022. The hedge fund increased its position in the company by 4,057% during the quarter. It currently owns 39.2 million MSFT shares, worth over $9.1 billion. The company represented 26.9% of Bill Gates’ portfolio.
In October, RBC Capital maintained an Outperform rating on Microsoft Corporation with a $310 price target, appreciating the company’s fiscal Q1 2023 results. The firm also appreciated the company’s management and its execution.
In 2022, Microsoft Corporation extended its dividend growth streak to 16 years, which makes it one of the top dividend stocks to buy. The company currently pays a quarterly dividend of $0.68 per share for a dividend yield of 1.12%, as of November 17.
At the end of Q2 2022, Microsoft Corporation was the most popular stock among hedge funds, with 258 funds taking up investments in the company, according to Insider Monkey’s data. The stakes owned by these hedge funds hold a collective value of over $56 billion.
Diamond Hill Capital mentioned Microsoft Corporation in its Q3 2022 investor letter. Here is what the firm has to say:
“Also among our bottom contributors were media and technology giant Alphabet, software and IT services provider Microsoft Corporation (NASDAQ:MSFT) and insurance company American International Group (AIG). Microsoft shares declined in Q3, along with other tech companies, as rising interest rates impacted the near-term outlook. We expect the business to continue to generate strong revenue growth and benefit from operating leverage. Microsoft’s cloud computing services business, Azure, is generating robust growth, confirming its competitive positioning.”
You can also take a look at Billionaire Ken Fisher’s Top 10 Dividend Stock Picks and Billionaire Ray Dalio’s Top 10 Dividend Stocks
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