In this article, we will discuss top 10 dividend stocks in Bill Gates’ portfolio.
Bill & Melinda Gates Foundation makes huge donations for philanthropic activities around the world. Since January 2020, the foundation has donated over $2 billion to the Covid-19 response. Moreover, the fund’s total charitable support amounted to over $6.7 billion, as of December 2021.
Bill Gates recently made headlines with his comments on AI. In a podcast with Nicolai Tangen, Gates said that Google’s search business profits are likely to plunge in the future as AI will affect how people search. He further called this technology one of the biggest inventions of the decade due to its exceptional ability to read and write, Fox Business reported.
Bill Gates and Melinda French have been strong proponents of the adverse effects of climate change on the world. In November 2022, the foundation pledged over $1.4 billion to help smallholder farmers to tackle the impact of climate change and improve food security in sub-Saharan Africa and South Asian regions.
At the end of Q4 2022, Bill & Melinda Gates Foundation had a 13F portfolio valued at over $35.7 billion, up from nearly $34 billion in the previous quarter. The hedge fund had investments in the technology, services, finance, and industrial goods sectors. Dividend stocks also made up a significant portion of the fund’s portfolio. Some of its prominent holdings in Q4 were The Kraft Heinz Company (NASDAQ:KHC), Caterpillar Inc. (NYSE:CAT), and Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF). In this article, we will discuss the top dividend stocks in Bill Gates’ portfolio.
Bill Gates
Our Methodology:
For this list, we selected dividend stocks in Bill Gates’ portfolio, as of Q4 2022. The stocks are ranked according to their stake value in Bill & Melinda Gates Foundation.
Bill Gates’ Current Portfolio: Top 10 Dividend Stocks
10. Hormel Foods Corporation (NYSE:HRL)
Bill Gates’ Stake Value: $99,995,460
Dividend Yield as of February 22: 2.42%
Hormel Foods Corporation (NYSE:HRL) is a Minnesota-based food processing company that specializes in selling and packaging of a wide range of food products. In December, Argus raised its price target on the stock to $54 with a Buy rating on the shares, appreciating the company’s recent quarterly earnings.
The Gates Foundation initiated its position in Hormel Foods Corporation during the fourth quarter of 2022, with shares worth nearly $100 million. The company represented 0.27% of Bill Gates’ portfolio.
Hormel Foods Corporation currently pays a quarterly dividend of $0.275 per share and has a dividend yield of 2.42%, as of February 22. The company has raised its dividends for 57 years in a row. The Kraft Heinz Company, Caterpillar Inc., and Coca-Cola FEMSA, S.A.B. de C.V. are some other prominent dividend stocks in the fund’s portfolio.
At the end of Q4 2022, 28 hedge funds tracked by Insider Monkey reported owning stakes in Hormel Foods Corporation, worth over $490.6 million collectively. Among these hedge funds, AQR Capital Management was one of the company’s leading stakeholders in Q4.
9. The Kraft Heinz Company (NASDAQ:KHC)
Bill Gates’ Stake Value: $106,766,046
Dividend Yield as of February 22: 4.01%
The Kraft Heinz Company is an American multinational food company, based in Chicago. During Q4 2022, the hedge fund did not change its position in the company with its total stake amounting to over $106.7 million. The company represented 0.29% of Bill Gates’ portfolio.
On February 15, The Kraft Heinz Company declared a quarterly dividend of $0.40 per share, which fell in line with its previous dividend. The company has been offering dividends to shareholders even before the merger of Kraft and Heinz in 2015. The stock’s dividend yield on February 22 came in at 4.01%.
In February, Piper Sandler raised its price target on The Kraft Heinz Company to $43 with a Neutral rating on the shares. The firm expects the company to show strong sales growth momentum.
As per Insider Monkey’s Q4 2022 database, 39 hedge funds held investments in The Kraft Heinz Company, with a collective value of over $13.8 billion. In the previous quarter, 40 elite funds had stakes in the company, worth over $11.8 billion.
8. United Parcel Service, Inc. (NYSE:UPS)
Bill Gates’ Stake Value: $128,761,376
Dividend Yield as of February 22: 3.63%
United Parcel Service, Inc. (NYSE:UPS) is a Georgia-based multinational shipping and supply chain management company. In February, BMO Capital raised its price target on the stock to $185 with a Market Perform rating on the shares. The firm noted the company’s steady execution and solid recent quarterly earnings.
On January 31, United Parcel Service, Inc. raised its quarterly dividend to $1.62 per share. Through this increase, the company stretched its dividend growth streak to 13 years. The stock has a dividend yield of 3.63%, as of February 22.
The Gates Foundation has been investing in United Parcel Service, Inc. since the fourth quarter of 2014. In the most recent quarter, the hedge fund owned 740,689 shares in the company, worth over $128.7 million. The company made up 0.36% of Bill Gates’ portfolio.
As of the close of Q4 2022, 36 hedge funds tracked by Insider Monkey owned investments in United Parcel Service, Inc., worth over $514.6 million.
Diamond Hill Capital mentioned UPS in Q3 2022 investor letter. Here is what the firm has to say:
“United Parcel Service, Inc. (NYSE:UPS) is the world’s largest package deliverer, operating globally. The company and its share price had benefited from pandemic-related spikes in shipping demand while supply was constrained (grounding of airlines and their associated space), leading to increased pricing power. Our view is such conditions will not persist as the environment normalizes. In Q3, UPS reported weak results and a decline in volume in its US domestic business, pressuring the share price.”
7. FedEx Corporation (NYSE:FDX)
Bill Gates’ Stake Value: $265,751,498
Dividend Yield as of February 22: 2.24%
FedEx Corporation (NYSE:FDX) is an American transport company that deals in e-commerce and other related services. On February 17, the company declared a quarterly dividend of $1.15 per share, consistent with its previous dividend. The company maintains a 21-year streak of consistent dividend growth. As of February 22, the stock has a dividend yield of 2.24%.
In February, BofA upgraded FedEx Corporation to Buy with a $233 price target, up from $204. The firm presented a positive outlook on the company and believes that its aspirational targets are moving closer to reality.
As of the close of Q4 2022, the Gates Foundation owned over 1.5 million shares in FedEx Corporation, worth over $165.7 million. The company accounted for 0.74% of Bill Gates’ portfolio.
At the end of December 2022, 48 hedge funds in Insider Monkey’s database owned stakes in FedEx Corporation, down from 57 in the previous quarter. These stakes have a total value of over $1.48 billion. Ken Griffin and Steve Cohen were some of the company’s leading stakeholders in Q4.
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.”
6. Walmart Inc. (NYSE:WMT)
Bill Gates’ Stake Value: $428,327,598
Dividend Yield as of February 22: 1.55%
Walmart Inc. (NYSE:WMT) is an Arkansas-based multinational retail corporation. On February 21, the company achieved its Dividend King status after raising its dividend for the 50th consecutive year. The company offers a quarterly dividend of $0.57 per share and has a dividend yield of 1.55%, as of February 22.
During the fourth quarter of 2022, the Gates Foundation did not change its position in Walmart Inc.. The hedge fund owned over 3 million shares in the company, worth over $428.3 million. The company represented 1.19% of Bill Gates’ portfolio. The Kraft Heinz Company, Caterpillar Inc., and Coca-Cola FEMSA, S.A.B. de C.V. were some other prominent holdings of the hedge fund in Q4.
As of the close of Q4 2022, 66 hedge funds tracked by Insider Monkey reported owning stakes in Walmart Inc., down from 68 in the previous quarter. These stakes have a total value of over $4.8 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%.”
5. Ecolab Inc. (NYSE:ECL)
Bill Gates’ Stake Value: $759,538,485
Dividend Yield as of February 22: 1.34%
Ecolab Inc. (NYSE:ECL) is a Minnesota-based chemicals company that specializes in the cleaning and hygiene of water in a variety of applications. On December 8, the company declared a 3.9% hike in its quarterly dividend to $0.53 per share. This marked the company’s 31st consecutive year of dividend growth. The stock has a dividend yield of 1.34%, as of February 22.
During the fourth quarter of 2022, Bill Gates’ hedge fund increased its position in Ecolab Inc. by 8%. The fund’s total stake in the company amounted to nearly $760 million. The company made up 2.12% of Bill Gates’ portfolio.
In February, Wells Fargo raised its price target on Ecolab Inc. to $175 with an Overweight rating on the shares, highlighting the company’s pricing power.
As of the close of Q4 2022, 47 hedge funds in Insider Monkey’s database owned stakes in Ecolab Inc., up from 42 in the previous quarter. These stakes have a total value of over $2 billion. Cantillon Capital Management is one of the company’s leading stakeholders in Q4.
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.”
4. Caterpillar Inc. (NYSE:CAT)
Bill Gates’ Stake Value: $1,761,631,770
Dividend Yield as of February 22: 1.99%
Caterpillar Inc. is an American manufacturing company that specializes in the production of construction equipment. The Gates Foundation has been investing in the company since the third quarter of 2012. In the most recent quarter, the hedge fund owned a CAT stake worth over $1.7 billion. The company represented 4.93% of Bill Gates’ portfolio.
In February, Credit Suisse lifted its price target on Caterpillar Inc. to $306 with an Outperform rating on the shares, appreciating the company’s performance last year.
Caterpillar Inc. currently pays a quarterly dividend of $1.20 per share and has a dividend yield of 1.99%, as of February 22. The company holds a 28-year streak of consistent dividend growth.
The number of hedge funds tracked by Insider Monkey owning stakes in Caterpillar Inc. grew to 50 in Q4 2022, from 43 in the previous quarter. These stakes have a total value of over $5 billion.
Diamond Hill Capital mentioned Caterpillar Inc. in its Q4 2022 investor letter. Here is what the firm has to say:
“In the case of Caterpillar Inc. (NYSE:CAT), the company reported a better-than-expected Q3 as demand in mining, non-residential construction and energy remained healthy through the year even as recession fears grew. Caterpillar showed strong pricing power and operating efficiency in the face of supply chain constraints and labor shortages, which in turn contributed to better-than-expected share price performance.”
3. Waste Management, Inc. (NYSE:WM)
Bill Gates’ Stake Value: $5,527,563,887
Dividend Yield as of February 22: 1.84%
Waste Management, Inc. (NYSE:WM) is a Texas-based company that offers environmental services to its consumers. At the end of Q4 2022, The Gates Foundation owned over $5.5 billion worth of stakes in the company, which made up 15.47% of the firm’s portfolio.
Waste Management, Inc. is another top dividend stock in Bill Gates’ portfolio as the company has grown its dividends for 16 years in a row. The company offers a quarterly dividend of $0.70 per share and has a dividend yield of 1.84%, as of February 22.
As per Insider Monkey’s Q4 2022 database, 44 hedge funds owned investments in Waste Management, Inc., up from 41 in the previous quarter. These investments are worth over $6.3 billion collectively. With over 2 million shares, Impax Asset Management was one of the company’s largest stakeholders in Q4.
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: $6,517,808,320
Dividend Yield as of February 22: 2.03%
Canadian National Railway Company (NYSE:CNI) is a Canadian-based transport company that provides services in trucking and rail shipping. On January 24, the company hiked its quarterly dividend by 7.8% to C$0.79. Through this increase, the company extended its dividend growth streak to 23 years. The stock’s dividend yield on February 22 came in at 2.03%.
Canadian National Railway Company was the third largest holding of the Gates Fund in Q4 2022. The hedge fund owned over 54.8 million CNI shares, worth over $6.5 billion. The company accounted for 18.24% of Bill Gates’ portfolio.
As of the close of Q4 2022, 41 hedge funds tracked by Insider Monkey held stakes in Canadian National Railway Company, worth over $13 billion collectively.
1. Microsoft Corporation (NASDAQ:MSFT)
Bill Gates’ Stake Value: $9,416,453,159
Dividend Yield as of February 22: 1.08%
Microsoft Corporation (NASDAQ:MSFT) tops our list of dividend stocks in Bill Gates’ portfolio. The company is the largest holding of Bill Gates and represented 26.3% of his portfolio. His hedge fund owned MSFT stake worth over $9.4 billion.
Microsoft Corporation currently offers a quarterly dividend of $0.68 per share and has a dividend yield of 1.08%, as of February 22. The company has been raising its payouts consistently for the past 16 years.
At the end of Q4 2022, 259 hedge funds in Insider Monkey’s database owned stakes in Microsoft Corporation, down from 269 in the previous quarter. These stakes have a total value of over $58.6 billion. Ken Griffin and Terry Smith were some of the company’s leading stakeholders in Q4.
Polen Capital mentioned Microsoft Corporation in its Q4 2022 investor letter. Here is what the firm has to say:
“In the case of Microsoft Corporation (NASDAQ:MSFT), the company is performing very well. Azure now represents nearly 25% of the total business and continues to compound at a higher rate. Although growth is moderating a bit recently (as it is for AWS and Google Cloud Platform as well), these three platforms collectively generated more than $140 billion in revenue during the last 12 months and are still growing at a healthy rate. Further, Microsoft Cloud, or commercial cloud (which includes Azure and other cloud services, Office 365 Commercial, the commercial portion of LinkedIn, Dynamics 365, and other cloud properties) continues to grow roughly 30% and is now about half the business. Mathematically, commercial cloud could decelerate to 20% growth with all other segments decelerating to zero growth and total company revenue growth would still be at least double digits. We believe Microsoft is positioned to compound underlying earnings per share at a midteens rate over the next five years. At 22x earnings, we felt the valuation was attractive and that it should be a large position.”
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This article is originally published at Insider Monkey.
