In this article, we will discuss the top 10 safe stocks to buy according to billionaire Richard Chilton.
Chilton Investment Company, founded by Richard L. Chilton, Jr. in 1992, aims to achieve appealing long-term returns while minimizing volatility. Since its establishment, the company has diligently adhered to a fundamental bottom-up investment approach, characterized by an ownership mindset. Its primary aim is to acquire fractional ownership in outstanding businesses rather than engaging in short-term stock trading.
Richard L. Chilton Jr. is the chairman, CEO, and chief investment officer of Chilton Investment Co. He has been a hedge fund manager for 18 years, which is a significant tenure in the challenging hedge fund industry. Chilton began his career in 1983 as an analyst with Alliance Capital Management, working alongside small-cap equity managers Frank Burr and Paul Jenkel. In 1990, he started a money management business for Allen & Co., a private bank, but left after two years to establish his own hedge fund company.
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Drawing on lessons in shorting stocks learned from Julian Robertson of Tiger Management Corp., Chilton set up his firm in a small, one-room office in New York, managing a classic long/short equity hedge fund. Chilton’s decision to start his own hedge fund was influenced by Art Samberg, a board member of the mutual fund Chilton co-managed. After expressing his desire to leave Allen & Co., where he had established a money management business, Samberg encouraged him to start his own fund, recognizing his talent. In January 1992, Chilton left Allen & Co., declined an offer from CEO Herbert Allen to buy a stake in his new venture, and instead accepted $1 million in investment from Allen, combining it with family money to launch his hedge fund with $5 million.
Starting his hedge fund in July 1992, Chilton aimed to create a classic long/short equity hedge fund, inspired by the first hedge fund model launched by Alfred Winslow Jones. His strategy was to always remain both long and short, without attempting to time the market. Chilton’s reputation grew through word of mouth, attracting prominent investors, endowments, and foundations. Pension funds later followed.
Chilton Investment’s appeal to institutional investors lies in its client-first approach and strong performance. The firm has been a leader in transparency and SEC registration. During the 2008 financial crisis, Chilton allowed clients to withdraw funds, which later returned. Chilton’s background in managing pension money at Alliance Capital gave him crucial experience in transparency and accountability, making his firm attractive for investors seeking long/short strategies. Chilton sees current opportunities in blue-chip companies with strong financials, solid dividend yields, and steady earnings growth. He expects these “dividend aristocrats” to outperform in a flat S&P environment, offering stability and consistent returns through growing dividends. Today, Chilton’s firm has grown significantly, with offices worldwide, a team of sector specialist analysts, and $7 billion under management across various strategies in global markets.
Richard L. Chilton Jr. graduated with a B.S. degree in Finance and Economics from Alfred University. Acknowledged for his business acumen, Forbes ranks Richard Chilton 773rd among the world’s wealthiest individuals, estimating his net worth at $1.3 billion. Chilton Investment Company caters to 9 clients, managing discretionary assets totaling $1,266,939,000, as per their Form ADV dated March 2024. Their 13F filing for Q1 2024 revealed managed 13F securities amounting to $3.6 billion.
Richard Chilton of Chilton Investment Company
Our Methodology
This article highlights the 10 safe stocks to buy according to billionaire Chilton, including analyst ratings and key details about each company, as well as the number of hedge funds invested in them.
Why focus on the stocks that hedge funds invest in? Our research shows that following the top picks of leading hedge funds can result in returns that beat the market. We use this strategy in our quarterly newsletter, where we choose 14 small-cap and large-cap stocks each quarter. Since May 2014, this approach has generated a 275% return, outperforming the benchmark by 150 percentage points. (see more details here)
10 Safe Stocks to Buy According to Billionaire Chilton
10. Mettler-Toledo International Inc. (NYSE:MTD)
Chilton Investment Company’s Stake Value: $130,116,291
Number of Hedge Fund Holders: 42
Mettler-Toledo International (NYSE:MTD) is one of the safe stocks to buy according to billionaire Chilton. Mettler-Toledo International (NYSE:MTD) is a top global supplier of precision instruments and services, catering to laboratory, industrial, and food retail sectors. Mettler-Toledo International (NYSE:MTD) reported Q2 sales of $943.8 million, a 2% decrease year-over-year, mainly due to foreign exchange headwinds, with China’s sales dropping 21% from a high base in FY’23. Operating income fell to $284 million, reflecting an 800 basis point year-over-year decline, driven by a 130 basis point contraction in operating margin.
Despite these challenges, Bernard Holdings’ Analyst Zach Bristow remains bullish on Mettler-Toledo International (NYSE:MTD), citing the company’s ability to generate $700 million to $1 billion in free cash flow annually. This strength is attributed to Mettler-Toledo International (NYSE:MTD)’s high returns on investor capital, exceeding 50%, and its highly sought-after product lines, which deliver post-tax margins of over 23% on sales with capital turnover greater than 1x. These economic characteristics support a strong buy rating, reinforcing Mettler-Toledo International (NYSE:MTD)’s potential for long-term growth.
Mettler-Toledo International (NYSE:MTD) landed on the 10th spot in our list of safe stocks to buy according to billionaire Chilton. At the end of the first quarter of 2024, Chilton Investment Company owned 97,737 shares of Mettler-Toledo International (NYSE:MTD), valued at $130,116,291. This investment made up 3.56% of Chilton Investment Company’s portfolio, according to regulatory filings.
9. Arthur J. Gallagher & Co. (NYSE:AJG)
Chilton Investment Company’s Stake Value: $138,135,098
Number of Hedge Fund Holders: 39
Arthur J. Gallagher & Co. (NYSE:AJG) is one of the safe stocks to buy according to billionaire Chilton. Arthur J. Gallagher & Co. (NYSE:AJG) is a global insurance brokerage, risk management, and consulting firm headquartered in Rolling Meadows, Illinois, founded in 1927. Arthur J. Gallagher & Co. (NYSE:AJG) operates in more than 150 countries, and has grown to become one of the largest insurance brokers in the world. Arthur J. Gallagher & Co. (NYSE:AJG) recently expanded its benefits consulting services by acquiring Cleary Benefits Group Inc., a firm specializing in advisory services for mid-size to large businesses. This acquisition enhances Arthur J. Gallagher & Co. (NYSE:AJG)’s expertise in health and welfare benefits and boosts its presence in the northeast region.
Arthur J. Gallagher & Co. (NYSE:AJG)’s growth strategy is driven by a robust mergers and acquisitions (M&A) pipeline. In the first quarter of 2024 alone, Arthur J. Gallagher & Co. (NYSE:AJG) completed 12 acquisitions, adding $69.2 million in annualized revenues. Arthur J. Gallagher & Co. (NYSE:AJG) posted a 13.37% increase in quarterly revenue, reaching $2.64 billion in Q2 2024, which contributed to a 17.58% year-over-year rise, bringing the total revenue for the past twelve months to $10.39 billion. Revenue is expected to keep climbing, potentially hitting $12.86 billion by 2025.
Analysts are optimistic about Arthur J. Gallagher & Co. (NYSE:AJG)’s future, with many issuing a “Buy” rating, with an average price target of $269, and a high estimate of $310, suggesting a possible 10% increase from current levels. Additionally, Arthur J. Gallagher & Co. (NYSE:AJG)’s earnings per share (EPS) are projected to grow by nearly 12% in 2025.
Arthur J. Gallagher & Co. (NYSE:AJG) ranked 9th on our list of safe stocks to buy according to billionaire Chilton. As of the end of the first quarter of 2024, Chilton Investment Company held 552,452 shares of AJG, valued at $138,135,098. This investment made up 3.78% of Chilton Investment Company’s total portfolio, based on regulatory filings.
8. Cintas Corporation (NASDAQ:CTAS)
Chilton Investment Company’s Stake Value: $140,606,873
Number of Hedge Fund Holders: 46
One of the companies that made it to the safe stocks to buy according to billionaire Chilton is Cintas Corporation (NASDAQ:CTAS). Cintas Corporation (NASDAQ:CTAS) specializes in renting and selling uniforms, as well as offering products and services like restroom supplies, mops, and first aid kits. On July 18th, Cintas Corporation (NASDAQ:CTAS) shareholders saw a 5.4% increase in the company’s share price. This rise followed the release of financial results for the last quarter of fiscal year 2024 and forecasts for fiscal year 2025. Management’s guidance suggests that 2025 will be even better than 2024.
In the final quarter of fiscal year 2024, Cintas Corporation (NASDAQ:CTAS) set a record with $2.47 billion in revenue, up 8.2% from the previous year. The core uniform rental and facility services segment saw a 7.8% revenue increase to $1.91 billion, driven by new and existing customers. Revenue from first aid and safety services grew by 11.2%, and ‘all other’ operations rose by 7.9%. For fiscal year 2025, Cintas Corporation (NASDAQ:CTAS) projects revenue growth of 6.4% to 8% and earnings per share between $16.25 and $16.75.
In its Q4 2024 Earnings Call Transcript, Cintas Corporation (NASDAQ:CTAS) announced that its business across various sectors continues to perform well:
“Fourth quarter net income was $414.3 million, an increase of 19.7%. Earnings per diluted share for the fourth quarter were $3.99, an increase of 19.8% over the prior year fourth quarter. These results conclude a strong fiscal year marked by significant accomplishments, including robust revenue growth and margin expansion and excellent cash generation, which continue to fuel our balanced capital allocation strategy. The following are specific highlights of fiscal ’24. I’d like to begin with revenue. Fiscal year revenue was a record $9.6 billion, an increase of 8.9%. Organic growth was 8% for the year. Our First Aid and Safety Services operating segment exceeded $1 billion in annual revenue for the first time. Our top line growth is a function of the total value proposition we offer customers of all sizes and across industries and unique Cintas culture that drives our partners to deliver an outstanding customer experience.
Business across our focused verticals of health care, hospitality, education, and state and local government continue to perform well. We experienced strong demand for our services not only from existing customers but across our new business pipeline. About two-third of our new customers continue to come from no-programmers, underscoring our ability to capitalize on the vast growth opportunity that remains ahead. In addition, our retention rates remain strong. Our strong revenue performance also translated into continued growth in profits and earnings, including the following highlights. Fiscal ’24 operating income grew 14.8% for the year, and our operating margin of 21.6% was an all-time high. EPS grew 16.6% for the year. Our enhanced profitability and earnings growth is a reflection of our relentless focus on operational excellence in every aspect of our business, spanning strategic sourcing and supply chain initiatives, route and energy optimization opportunities with SmartTruck, and leveraging the SAP system to support greater stockroom visibility and efficient garment sharing.”
Investment analyst Quad 7 Capital predicts that Cintas Corporation (NASDAQ:CTAS) will continue to grow into fiscal year 2025. Although Cintas Corporation (NASDAQ:CTAS) currently has a high price-to-earnings ratio of 46X, its ongoing growth and share repurchases indicate potential for future appreciation. Despite the current high price, Cintas Corporation (NASDAQ:CTAS)’s strong financial results, efficient operations, and positive growth outlook justify its premium. Cintas Corporation (NASDAQ:CTAS) is recommended for long-term investors, particularly if there are chances to buy during market dips.
Cintas Corporation (NASDAQ:CTAS) is ranked 8th on our list of safe stocks to buy according to billionaire Chilton. By the end of the first quarter of 2024, Chilton Investment Company held 818,636 shares of Cintas Corporation (NASDAQ:CTAS), valued at $140,606,873. This investment represented 3.85% of Chilton’s total portfolio, based on regulatory filings.
7. Mastercard Incorporated (NYSE:MA)
Chilton Investment Company’s Stake Value: $153,061,727
Number of Hedge Fund Holders: 148
Mastercard Incorporated (NYSE:MA) is a leading global payments technology company that connects consumers, businesses, and financial institutions to facilitate secure and efficient electronic transactions worldwide. Mastercard Incorporated (NYSE:MA)’s revenue continues to grow steadily, driven by higher consumer spending, expansion into new markets, and the growth of digital payments. With solid profit margins and strong cash flow, Mastercard Incorporated (NYSE:MA) is well-equipped to handle economic challenges while staying profitable. Additionally, Mastercard Incorporated (NYSE:MA)’s ongoing focus on innovation—particularly in digital solutions, cybersecurity, and new payment technologies—as well as its ventures into data analytics and AI, further strengthens its future growth prospects.
Although Mastercard Incorporated (NYSE:MA)’s dividend yield is currently low at 0.6%, its impressive history of dividend increases makes it an attractive investment. Mastercard Incorporated (NYSE:MA) has raised its dividend for 12 straight years, with a 500% increase over the last decade, reflecting an annual growth rate of about 20%. This consistent dividend growth suggests that Mastercard Incorporated (NYSE:MA) could offer a higher yield in the future if this trend continues. Additionally, despite the modest yield, Mastercard Incorporated (NYSE:MA) has provided exceptional returns, achieving a 552% total return over the past 10 years compared to the S&P 500’s 227%.
Mastercard Incorporated (NYSE:MA) consistently earns “Buy” ratings from analysts as they see considerable growth potential, with price targets ranging from $424 to $545 and an average of $493.47, indicating a possible increase of up to 17.24%. Mastercard Incorporated (NYSE:MA) is ranked 7th on our list of safe stocks to buy according to billionaire Chilton. By the end of the first quarter of 2024, Chilton Investment Company owned 317,839 shares of Mastercard Incorporated (NYSE:MA), worth $153,061,727. This investment made up 4.19% of Chilton’s total portfolio, according to regulatory filings.
L1 Capital International Fund stated the following regarding Mastercard Incorporated (NYSE:MA) in its Q2 2024 investor letter:
“The share prices of Mastercard Incorporated (NYSE:MA) and Visa, both long term Fund investments, have both drifted down over recent months. There have been no dramatic developments, but there has been a general slight softening in the rate of growth of consumer spending in the U.S. and globally, a court decision rejecting Mastercard and Visa’s proposed settlement of a long-lasting dispute with U.S. merchants as well as other modest adverse regulatory developments. We continue to view Mastercard and Visa as two of the highest quality businesses in the world, and both are well placed to continue to deliver attractive, risk adjusted returns to shareholders over time.”
6. Canadian Pacific Kansas City Limited (NYSE:CP)
Chilton Investment Company’s Stake Value: $157,082,967
Number of Hedge Fund Holders: 48
Canadian Pacific Kansas City Limited (NYSE:CP) is one of the safe stocks to buy according to billionaire Chilton. Canadian Pacific Kansas City Limited (NYSE:CP) is a major North American transportation company specializing in rail freight, offering services that link Canada, the United States, and Mexico. Canadian Pacific Kansas City Limited (NYSE:CP) is set for strong growth due to its robust domestic intermodal business and a strong Canadian grain harvest. The merger with Kansas City Southern (KCS) is also generating significant revenue synergies, enhancing train speeds and reducing terminal delays. These factors position Canadian Pacific Kansas City Limited (NYSE:CP) well to take advantage of cross-border trade, benefit from trends like nearshoring, and increase its market share.
On its recent earnings call, CFO Nadeem Velani stated that Canadian Pacific Kansas City Limited (NYSE:CP) expects to improve its operating ratio in Q4 2024 compared to the previous year, despite challenging comparisons. After posting a 58.7% operating ratio in Q4 2023, a better ratio in Q4 2024 would show significant margin improvement from Q3 2024.
“I think we’ve been accruing on what we anticipate a fair ruling and a fair kind of win-win situation between us and labor. And so I’m not concerned about that. I mean in the near term, we’re going to have a bit of headwind. We had a significant casualty costs that that we faced in July we’re going to feel in the third quarter. That being said, there’s still two months left in the quarter, and we got to keep them on rail, and we can help mitigate some of those costs. And I think we’ve seen some additional stock-based comp costs that we’re going to feel in Q3 year-over-year. Outside of that, the way the network is running and the operating leverage that I see in front of us, I think it more than offset some of those costs, and I think we’re going to have a very strong back half of the year.
So perhaps not sequential improvement in the OR in Q3, because of some of those headwinds I just mentioned. But I think in Q4, we’re set up to have a record operating ratio for CPKC, and I think it’s going to be a very strong finish to the year, and it’s going to set us up for a 2025 that I think could be a very powerful earnings model.”
GS analytics analysts are optimistic about Canadian Pacific Kansas City Limited (NYSE:CP)’s medium to long-term margin prospects with an attractive FY25 forward P/E valuation and are considering the company a strong buy. They expect Canadian Pacific Kansas City Limited (NYSE:CP) should benefit from volume leverage, synergy gains, and improved pricing in the long run.
Canadian Pacific Kansas City Limited (NYSE:CP) is ranked 6th on safe stocks to buy according to billionaire Chilton. As of the end of Q1 2024, Chilton Investment Company held 1,781,592 shares of Canadian Pacific Kansas City Limited (NYSE:CP), valued at $157,082,967. This investment accounted for 4.3% of Chilton’s total portfolio, according to regulatory filings.
5. The Home Depot, Inc. (NYSE:HD)
Chilton Investment Company’s Stake Value: $224,739,732
Number of Hedge Fund Holders: 70
Ranking 5th in our list of the safe stocks to buy according to billionaire Chilton is The Home Depot, Inc. (NYSE:HD). The Home Depot, Inc. (NYSE:HD) is a leading home improvement retailer offering a wide range of products and services for home renovation and repair, with a strong focus on both in-store and e-commerce solutions. Since 1993, The Home Depot, Inc. (NYSE:HD) has grown nearly ninefold, reaching 2,337 stores by the end of Q1 2024. This expansion, coupled with increased revenue, has driven rising earnings, allowing The Home Depot, Inc. (NYSE:HD) to return significant capital to investors consistently.
The Home Depot, Inc. (NYSE:HD) is set for continued growth with its focus on expanding e-commerce, an efficient supply chain, and effective customer loyalty programs. The Home Depot, Inc. (NYSE:HD) also gains from current home improvement trends, particularly in a high-interest rate environment where homeowners prefer to renovate instead of moving. The Home Depot, Inc. (NYSE:HD) is one of the safe stocks to buy according to billionaire Chilton. As of the end of Q1 2024, Chilton Investment Company held 585,870 shares of The Home Depot, Inc. (NYSE:HD), valued at $224,739,732. This investment accounted for 6.15% of Chilton’s total portfolio, according to regulatory filings.
Polen Focus Growth Strategy stated the following regarding The Home Depot, Inc. (NYSE:HD) in its Q2 2024 investor letter:
“In the second quarter, the top relative contributors to the Portfolio’s performance were all names we do not hold: The Home Depot, Inc. (NYSE:HD), Meta Platforms, and AbbVie. With Home Depot, much of the quarter’s weakness came in April, as a higher-than-expected inflation reading caused investors to question the likelihood of imminent rate cuts in 2024. Given Home Depot’s sensitivity to interest rates, as it relates to home improvement projects, the stock sold off in the period.”
4. Republic Services, Inc. (NYSE:RSG)
Chilton Investment Company’s Stake Value: $251,583,747
Number of Hedge Fund Holders: 45
Ranking 4th in our list of the safe stocks to buy according to billionaire Chilton is Republic Services, Inc. (NYSE:RSG). Republic Services, Inc. (NYSE:RSG) is a leading provider of environmental services in the United States, specializing in waste collection, recycling, and disposal. Republic Services (NYSE:RSG), the second-largest waste services provider in North America, holds a dominant position in an industry that thrives on scale and route density. Although its growth has traditionally been slower than its peers, Republic Services, Inc. (NYSE:RSG) is actively working to close that gap by advancing its use of technology.
Republic Services, Inc. (NYSE:RSG) is introducing digital tools, such as waste tracking, to boost customer loyalty and set itself apart from competitors. It is also implementing advanced technology in its collection routes, like cameras to detect overfill and contamination, which is already generating significant revenue. Having achieved $30 million in annual benefits so far, Republic Services, Inc. (NYSE:RSG) expects to reach $100 million in annual earnings through its RISE digital platform.
Among the 21 sellside analysts covering the stock, 9 rates it as a ‘buy,’ 11 as a ‘hold,’ and 1 as a ‘sell.’ The analysts have an average price target of $202.34, with the highest target at $230 and the lowest at $142. As of the end of Q1 2024, Chilton Investment Company held 1,314,165 shares of Republic Services, Inc. (NYSE:RSG), valued at $251,583,747. This investment accounted for 6.89% of Chilton’s total portfolio, according to regulatory filings.
ClearBridge Sustainability Leaders Strategy stated the following regarding Republic Services, Inc. (NYSE:RSG) in its Q2 2024 investor letter:
“We added two new names to the portfolio in the quarter. Republic Services, Inc. (NYSE:RSG) is a waste disposal company in the industrials sector whose services include non-hazardous solid waste collection, waste transfer, waste disposal, recycling and energy services. It is a stable-through-the-cycle compounder in a consolidated industry. The company’s end market is resilient, which gives us some confidence in the stability of its earnings through a recession. In the next few years, cash flow should grow at the high end of the range as Republic Services benefits from high-returning sustainability investments in polymer recycling and renewable natural gas, which also improve the company’s emission and circularity profile.
Republic Services continues to set ambitious goals around sustainability targets, such as increasing its renewable energy generation by 50% through the beneficial reuse of biogas. In addition, its 74 recycling centers process five million tons of materials per year and include a major polymers center for plastics. Notably, it is the first North American waste and recycling company with an emissions reduction goal approved by the Science-Based Targets initiative (SBTi).”
3. Costco Wholesale Corporation (NASDAQ:COST)
Chilton Investment Company’s Stake Value: $282,887,492
Number of Hedge Fund Holders: 65
Costco Wholesale Corporation (NASDAQ:COST) ranks 3rd in our list of safe stocks to buy according to billionaire Chilton. Costco Wholesale Corporation (NASDAQ:COST) is a leading global retailer known for its membership-based warehouse stores, offering a wide range of high-quality products in bulk at competitive prices to both individual consumers and businesses. Costco Wholesale Corporation (NASDAQ:COST)’s primary appeal lies in its ability to offer bulk goods at discounted prices, which is particularly attractive to groups like college students or households sharing expenses. This model remains popular, especially during periods of economic stress, as it provides lower and middle-income US consumers with a cost-effective shopping option.
Costco Wholesale Corporation (NASDAQ:COST)’s strategy not only helps maintain strong consumer foot traffic but also enhances shareholder value. Costco Wholesale Corporation (NASDAQ:COST)’s investor metrics reveal a remarkable return on common equity of 31.64% over the past twelve months, significantly higher than the sector median of 10.70%. As of the end of Q1 2024, Chilton Investment Company held 386,126 shares of Costco Wholesale Corporation (NASDAQ:COST), valued at $282,887,492 making it one of the safe stocks to buy according to billionaire Chilton. This investment accounted for 7.75% of Chilton’s total portfolio, according to regulatory filings.
ClearBridge Sustainability Leaders Strategy stated the following regarding Costco Wholesale Corporation (NASDAQ:COST) in its Q2 2024 investor letter:
“Consumer staples holdings were also standouts in the quarter, such as Costco Wholesale Corporation (NASDAQ:COST), which continues to execute well and delivered better than expected earnings, helped by strong traffic driving better expense leverage. Customers also looked to be shifting toward more discretionary purchases.”
2. The Sherwin-Williams Company (NYSE:SHW)
Chilton Investment Company’s Stake Value: $317,175,851
Number of Hedge Fund Holders: 78
The Sherwin-Williams Company (NYSE:SHW) makes it in our list of safe stocks to buy according to billionaire Chilton. The Sherwin-Williams Company (NYSE:SHW) produces corrosion-resistant coatings for commercial vessels and the marine industry, protecting harsh, humid environments. The Sherwin-Williams Company (NYSE:SHW) serves residential, commercial, and industrial customers, which adds diversification to its business model and helps mitigate the impact of market cycles.
The Sherwin-Williams Company (NYSE:SHW), organized into three segments—Paint Stores Group, Consumer Brands Group, and Performance Coatings Group—demonstrates a strong growth trajectory, particularly in its Paint Stores Group, which generates over 50% of the company’s revenue and has shown significant growth of 12.6% and 7.3% since 2021. While the Consumer Brands Group has faced challenges with minimal growth, the Performance Coatings Group has maintained steady progress, with a 13% increase from 2021 to 2022.
Analyst Jay Capital rates The Sherwin-Williams Company (NYSE:SHW) as a ‘buy’, citing the improving macroeconomic environment, stronger market position, and favorable cost outlook. He believes that management’s FY24 EPS guidance is conservative and expects The Sherwin-Williams Company (NYSE:SHW) to surpass the high end of this range, potentially reaching $12.2, which would likely provide a significant boost to investor sentiment.
The Sherwin-Williams Company (NYSE:SHW) ranks 2nd in our list of safe stocks to buy according to billionaire Chilton. At the end of Q1 2024, Chilton Investment Company owned 913,183 shares of The Sherwin-Williams Company (NYSE:SHW), valued at $317,175,851. According to regulatory filings, this investment represented 8.69% of Chilton’s total portfolio.
1. Microsoft Corporation (NASDAQ:MSFT)
Chilton Investment Company’s Stake Value: $365,858,112
Number of Hedge Fund Holders: 293
Topping our list of safe stocks to buy according to billionaire Chilton is Microsoft Corporation (NASDAQ:MSFT). Microsoft Corporation (NASDAQ:MSFT) stands out as a compelling investment due to its dominant position in cloud computing through Azure, which continues to drive significant revenue growth. Microsoft Corporation (NASDAQ:MSFT)’s diverse portfolio, spanning software, gaming, and AI, offers multiple revenue streams and provides stability against market fluctuations.
From April to June 2024, Microsoft Corporation (NASDAQ:MSFT) reported total revenues of about $64.7 billion, marking a 15.2% increase compared to the same period in the previous year, when revenues were $56.2 billion. This figure slightly exceeded analysts’ expectations, which had forecasted $64.4 billion. According to Cavenagh Research, updated projections for Microsoft Corporation (NASDAQ:MSFT)’s earnings per share (EPS) are expected to reach approximately $11.3 in 2024, $12.9 in 2025, and $13.4 in 2026.
Microsoft Corporation (NASDAQ:MSFT) is one of the best-run legacy businesses with competitive advantages in office productivity software, cloud, and AI. Its Azure cloud business is consistently gaining market share and Microsoft can leverage its tech prowess to deliver improved user experience in its office productivity tools. Microsoft Copilot is now integrated into Microsoft 365, Dynamics 365, and GitHub, and the company is executing well on democratizing AI.
It’s one of the safest stocks to buy according to Richard Chilton. Over the past 10 years, Microsoft’s revenue has compounded at ~11% annually, and its net income has grown at a CAGR of ~15%. Chilton Investment Company owned 869,600 shares of Microsoft Corporation (NASDAQ:MSFT), valued at $365,858,112.
While we acknowledge the potential of Microsoft Corporation (NASDAQ:MSFT), our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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