In this article, we discuss the 5 best dividend stocks according to Bill Gates. If you want to read our detailed analysis of Bill Gates’ investment philosophy, go directly and see Bill Gates’ 10 Dividend Stocks.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now, let’s take a look at Bill Gates’ top 5 dividend holdings:
5. Waste Management, Inc. (NYSE:WM)
Bill & Melinda Gates’ Stake Value: $2,610,764,000
Percent of Bill & Melinda Gates’ 13F Portfolio: 10.93%
Number of Hedge Fund Holders: 39
Dividend Yield: 1.49%
Waste Management, Inc. (NYSE:WM) is an American waste management and environmental services company based in North America. The company offers services such as garbage disposal, recycling, and dumpster collection. Waste Management, Inc. (NYSE:WM) ranks fifth on our list of Bill Gates’ 10 dividend stocks.
As of Q2 2021, Waste Management, Inc. (NYSE:WM) is the second-largest holding of Gates’ Foundation. The hedge fund holds over 18.6 million shares in the company, valued at over $2.6 billion. The company represents 10.93% of the hedge fund’s 13F portfolio.
In Q2 2021, Waste Management, Inc. (NYSE:WM) posted an EPS of $1.27, beating the estimates by $0.08. The company’s revenue of $4.48 billion represented a 25.8% growth from the prior-year quarter. Waste Management, Inc. (NYSE:WM) pays an annual dividend of $2.30 per share, yielding 1.49%. The company has a track record of 18 years of consistent dividend growth. In July, BMO Capital lifted its price target on Waste Management, Inc. (NYSE:WM) to $159, while keeping an ‘Outperform’ rating on the shares. In the past year, the stock returned 34.1%.
As of Q2 2021, 39 hedge funds tracked by Insider Monkey have positions in Waste Management, Inc. (NYSE:WM), up from 32 in the previous quarter. The total value of these stakes is over $3.6 billion. After Bill & Melinda Gates Foundation, Impax Asset Management holds the most shares in the company, valued at $366.6 million.
4. United Parcel Service, Inc. (NYSE:UPS)
Bill & Melinda Gates’ Stake Value: $582,688,000
Percent of Bill & Melinda Gates’ 13F Portfolio: 2.44%
Number of Hedge Fund Holders: 52
Dividend Yield: 2.24%
United Parcel Service, Inc. (NYSE:UPS) ranks fourth on our list of Bill Gates’ 10 dividend stocks. It is an American shipping and supply chain management company. The company uses a hub-and-spoke model for its network.
As of Q2 2021, Gates Foundation holds 2.8 million shares in United Parcel Service, Inc. (NYSE:UPS), valued at $582.6 million. The company represents 2.44% of the hedge fund’s 13F portfolio. In September, Evercore ISI initiated its coverage on United Parcel Service, Inc. (NYSE:UPS) with an ‘Outperform’ rating and a $225 price target. The firm’s analyst noted the company’s pricing power with a focus on capital discipline. The firm believes that United Parcel Service, Inc. (NYSE:UPS) can benefit from higher global supply chain urgency. In Q2 2021, the company posted an EPS of $3.06, beating the estimates by $0.25. United Parcel Service, Inc. (NYSE:UPS) pays an annual dividend of $4.08 per share, yielding 2.24%. The stock returned 12.02% in 2021.
The number of hedge funds having stakes in United Parcel Service, Inc. (NYSE:UPS) grew in the second quarter to 52, from 44 in the previous quarter. The total value of these stakes is over $2.1 billion.
ClearBridge Investments mentioned United Parcel Service, Inc. (NYSE:UPS) in its Q2 2021 investor letter. Here is what the firm has to say:
“We funded the shift primarily with trims in UPS following big gains in this name. UPS is a long-term holding that have been and remain core holdings. During the quarter, however, we took gains and resized the positions to reflect their current risk-reward post strong increases in the stocks.
UPS too has been a core, long-term holding. For many years its stock languished alongside fundamental performance that was both uneven and often uninspiring. Since Carol Tomé took the reins last summer and capitalized on COVID-19-related freight disruptions, UPS’s earnings have soared, and the stock has followed suit. We trimmed the position toward the end of the quarter despite continued near-term momentum and an undemanding valuation multiple. This trim reflects the longerterm risk, though hard to quantify, that Amazon may become a full-fledged competitor and meaningfully disrupt the dynamics of the industry. While not our base case, this risk cannot be disproven. We continue to be very bullish on UPS’s near-term outlook and optimistic about its longer-term outlook, while also continually looking over our shoulder to make sure Amazon is not on our heels.”
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.”
2. Crown Castle International Corp. (REIT) (NYSE:CCI)
Bill & Melinda Gates’ Stake Value: $992,411,000
Percent of Bill & Melinda Gates’ 13F Portfolio: 4.15%
Number of Hedge Fund Holders: 42
Dividend Yield: 3.13%
Crown Castle International Corp. (REIT) (NYSE:CCI) is an American real estate investment trust that invests in shared communications infrastructure in the U.S. The company ranks second on our list of Bill Gates’ 10 dividend stocks.
As of Q2 2021, Gates Foundation holds over 5 million shares in Crown Castle International Corp. (REIT) (NYSE:CCI), valued at $992.4 million. The company represents 4.15% of the hedge fund’s 13F portfolio.
In Q2 2021, Crown Castle International Corp. (REIT) (NYSE:CCI) posted an FFO of $1.71, beating the estimates by $0.08. The company reported revenue of $1.58 billion, presenting a 9.7% year-over-year growth. Crown Castle International Corp. (REIT) (NYSE:CCI) pays an annual dividend of $5.32 per share to its shareholders, yielding 3.13%. The company has grown its dividend by 26.41% in the past three years.
This September, Morgan Stanley lifted its price target on Crown Castle International Corp. (REIT) (NYSE:CCI) to $213, while maintaining an ‘Overweight’ rating on the shares. The firm’s analyst expects the company to benefit from the growth in the domestic tower because of the growing 5G leasing cycle. Since the beginning of the year, Crown Castle International Corp. (REIT) (NYSE:CCI) gained 6.68%.
As of Q2 2021, 42 hedge funds tracked by Insider Monkey have positions in Crown Castle International Corp. (REIT) (NYSE:CCI), compared with 43 in the previous quarter. These stakes are valued at over $2 billion.
ClearBridge Investments mentioned Crown Castle International Corp. (REIT) (NYSE:CCI) in its Q2 2021 investor letter. Here is what the firm has to say:
“Turning to the U.S., U.S. communications company Crown Castle was one of the lead performers. Crown Castle is the leading independent owner and operator of wireless communications infrastructure in the U.S. with a portfolio of approximately 40,000 towers. Crown Castle performed well after the U.S. network operators announced plans to deploy 5G spectrum, with investment much larger and much sooner than the market was anticipating.”
1. Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF)
Bill & Melinda Gates’ Stake Value: $328,945,000
Percent of Bill & Melinda Gates’ 13F Portfolio: 1.37%
Number of Hedge Fund Holders: 9
Dividend Yield: 4.53%
Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) tops our list of Bill Gates’ 10 dividend stocks. It is a Mexican multinational beverage company and a subsidiary of FEMSA, which operates the Coca-Cola bottling group.
As of Q2 2021, Gates Foundation holds 6.2 million shares in Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF), valued at nearly 329 million. The company accounts for 1.37% of the hedge fund’s 13F portfolio. In August, Goldman Sachs initiated its coverage on Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) with a ‘Buy’ rating and a $70 price target. In Q2 2021, the company reported revenue of Ps. 47.7 billion, up 10.9% from the prior-year quarter. Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) pays an annual dividend of $2.46 per share, yielding 4.53%. The company has increased its dividend by 23.7% in the past three years. Since the beginning of the year, Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) delivered an 18.8% return to shareholders, while its 12-month returns stood at 27.06%.
As of Q2 2021, 9 hedge funds tracked by Insider Monkey have positions in Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF), compared with 10 in the previous quarter. The total value of these stakes is $461.9 million.
You can also take a look at Bill Gates’ Top 10 High Dividend Stocks and Will Bill Gates’ Divorce Affect These Stocks?
