Bill Gates’ Top 5 Dividend Stocks

In this article, we discuss top dividend stocks to buy according to billionaire Bill Gates. If you want to read our detailed analysis of Gates’ foundation and its performance over the years, go directly to read Bill Gates’ Top 10 Dividend Stocks. 

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. (NASDAQ:CAT) in October to $235 with a Neutral rating on the shares.

Caterpillar Inc. (NASDAQ:CAT) 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. (NYSE:CAT), compared with 54 in the previous quarter. These stakes are collectively valued at over $3.25 billion.

Diamond Hill Capital mentioned Caterpillar Inc. (NYSE:CAT) 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 (NYSE:DE) 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 (NYSE:DE) 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 (NYSE:DE), with a total value of over $1.58 billion.

ClearBridge Investments mentioned Deere & Company (NYSE:DE) 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. (NYSE:WM) 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. (NYSE:WM) 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. (NYSE:WM) 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. (NYSE:WM) 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 (NYSE:CNI) 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 (NYSE:CNI) 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 (NYSE:CNI), 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 (NASDAQ:MSFT) 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 (NASDAQ:MSFT) 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 (NASDAQ:MSFT) 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 (NASDAQ:MSFT) 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 (NASDAQ:MSFT) 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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