Centi-Billionaire Bill Gates’ Top 15 Dividend Stocks

Published on December 21, 2023 at 9:28 am by Ruchi Gupta in Dividend Stocks, Hedge Funds, News

In this article, we discuss centi-billionaire Bill Gates’ top 15 dividend stocks. You can skip our detailed analysis of Bill Gates’ investment philosophy and his major investments, and go directly to read Bill Gates’ Top 5 Dividend Stocks.

Every investor dreams of accumulating higher returns and making massive profits while investing in the equity markets. While the focus is always on gaining from the share value appreciation, it’s not the only way to book profits in the stock markets. Investing in dividend stocks offers one of the best ways of reaping a steady and consistent source of income even when the overall market is under pressure.

The best dividend stocks are companies with a strong foothold and solid presence in their respective industries. Nevertheless, dividend stocks are broadly classified into two. Dividend growth stocks are of established companies that have achieved maturity peak. While such companies may not offer higher yields than companies in the same sector, they are cherished as they consistently increase their dividend payouts.

On the other hand, high-yield dividend stocks may keep their rate the same as they are already paying much more. Knowing which stock to invest in for dividends can always be challenging, given the myriads of companies offering such payouts. However, that should never be the case when one knows where to look for.

One of the best ways of discovering the best dividend stocks for steady income entails following what professionals do. Bill Gates has always been a staunch supporter of technology, given its potential to drive positive change. It is a picture well painted by technology stocks accounting for the most significant portion of the Bill and Melinda Gates Foundation Trust.

Ranked as one of the wealthiest people in the world, Gates also has a well-documented affinity for pursuing dividend income in the equity markets. Therefore, tracking and following what Gates does and invests in through the Trust is one of the best ways of gaining a head start in investing for dividends.

Investing in dividend stocks has always been one of the billionaire investor strategies for generating reliable passive income for supporting a myriad of philanthropic activities. The Bill and Melinda Gates Foundation finances various global issues, including healthcare, poverty alleviation education, and access to information technology. The Trust also invests in endowments to generate much-needed returns to support philanthropic efforts.

As the Trust expands its footprint to reach millions of people in low-income countries worldwide, it has increased its focus and investments in the top dividend stocks that generate consistent dividend income. The investment strategy has allowed the foundation to generate sufficient returns to be able to spend over $53 billion in grant donations and other humanitarian activities.

While Gates generates a staggering $464.5 million from his dividend portfolio, most of the gains are based on picking companies with strong and growing dividend yields. Focusing on solid yields rather than high yields affirms the Bill and Melinda Gates Foundation’s affinity for sustainable long-term income streams. The Coca-Cola Company (NYSE:KO), Apple Inc. (NASDAQ:AAPL), and JPMorgan Chase & Co. (NYSE:JPM) are some of the companies that Gates has always turned to, given their track record in paying dividends.

Diversification has also been an important strategy that Gates has always relied on, even as he pursued dividend income in the markets. This is evident by the Bill and Melinda Gates Foundation Trust investing in various sectors, including technology. The investment strategy has allowed the billionaire investor to generate consistent dividend income regardless of the prevailing economic situation.

Bill Gates' top 15 dividend stocks

The Federal Reserve hiking interest rates to 5.25% is already putting pressure on growth stocks, especially in the technology sector. With the high-interest rate environment expected to remain in place for much longer, growth stocks may have to contend with high-interest expenses from bonds, loans, and convertible debt.

Increased interest expenditure from various financing options is likely to pressure companies’ earnings, which could affect dividend offering allocations. Money losing technology stocks remain the most vulnerable in a high-interest rate environment as they are the ones that raise significant capital to sustain research and development operations.

On the other hand, financial companies are expected to remain resilient as they make more money on high-interest rates on lending to people, companies, and other businesses. Therefore, diversifying an investment portfolio beyond technology stocks and into financials and consumer goods sectors that perform well amid rising interest rates is a sure way of safeguarding passive income through dividends.

Our Methodology

Bill Gates concentrates most of his holdings on stocks with a track record of growing and paying dividends over time. Likewise, we have analyzed 13F Fillings and selected top dividend stocks in Bill Gates’ portfolio as of Q3 2023. The stocks are ranked in terms of stake value. The chosen stocks vary by size and industry. Still, they are all well positioned to generate long-term dividend income amid the high-interest rate environment going by their impressive payout record. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.

Bill Gates’ Top Dividend Stocks

15. JPMorgan Chase & Co. (NYSE:JPM)

Number of Hedge Fund Holders: 109

Bill & Melinda Gates Foundation Trust’s Equity Stake: $4.29 Million

Dividend Yield 2.52%

JPMorgan Chase & Co. (NYSE:JPM) is one of Bill Gates top dividend stocks offering exposure to the financial sector. Operating as a financial services company, it provides deposit and lending products.

JPMorgan Chase & Co. (NYSE:JPM) is the latest addition to the Bill & Melinda Gates Foundation Trust after purchasing $4.29 million stakes in Q3 2023. JPMorgan Chase & Co. (NYSE:JPM) is one of the dividend aristocrats that has been paying dividends for 33 years.

Currently, it offers a $1.05 quarterly dividend and a 2.52% dividend yield and is well poised to benefit from the high-interest rate environment by generating more earnings from interest payments on loans.

As of September 2023, 109 out of the 910 hedge funds polled by Insider Monkey had held a stake in the bank, up from 106 in the preceding quarter. JPMorgan Chase & Co. (NYSE:JPM)’s leading investor in Q3 was Ken Fisher’s Fisher Asset Management, which owned 11.3 million shares worth $1.6 billion.

14. Eaton Corporation plc (NYSE:ETN)

Number of Hedge Fund Holders: 55

Bill & Melinda Gates Foundation Trust’s Equity Stake: $5.57 Million

Dividend Yield 1.47%

Eaton Corporation plc (NYSE:ETN) is one of Bill Gates’ investment plays in the industrial sector, operating as a power management company. Eaton Corporation plc (NYSE:ETN) offers electrical components, industrial components, power distribution, and assemblies.

The opening of the global economy following the COVID-19 pandemic has translated into booming business for industrial companies. Eaton Corporation plc (NYSE:ETN) is up by about 48% for the year and continues to generate passive income for shareholders with a quarterly dividend of $0.86 a share and a 1.47% yield. The Gates Trust acquired stakes worth $5.57 million in the company in Q3, impressed by the company’s 33-year dividend-paying history and share price gain.

During September 2023, 55 out of the 910 hedge funds profiled by Insider Monkey had bought and owned Eaton Corporation plc (NYSE:ETN)’s shares. In the same quarter, Philippe Laffont’s Coatue Management was the firm’s significant shareholder, as it owned 3.7 million shares worth $808 million.

13. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 134

Bill & Melinda Gates Foundation Trust’s Equity Stake: $9.04 Million

Dividend Yield 0.49%

Gates further affirmed his interest in technology stocks by investing in Apple Inc. (NASDAQ:AAPL) in the third quarter. The company has made a name for itself in developing and selling smartphones, wearables, personal computers, and tablets.

Apple Inc. (NASDAQ:AAPL) has always rewarded investors with dividends for 34 years, affirming its status as one of the most sought-after dividend aristocrats. Apple Inc. (NASDAQ:AAPL) currently offers a 0.49% yield with a quarterly dividend of $0.24 a share. Bill & Melinda Gates Foundation Trust opened a new position worth $9.04 million in the company in Q3 2023.

At the end of the third quarter of 2023, 134 hedge funds in the Insider Monkey database held stakes in Apple Inc. (NASDAQ:AAPL), compared to 135 in the previous quarter.

In its Q3 2023 investor letter, Baron Funds highlighted a few stocks, and Apple Inc. (NASDAQ:AAPL) was one of them. Here is what the fund said:

“After a strong start to the year, shares of Apple Inc. partially retraced their gains this quarter. Mixed second calendar quarter financial results, with iPhone, iPad, and Wearables revenue coming in just shy of consensus expectations, coupled with elevated investor concerns about the macro economy and potential weakness in consumer spending later this year, pressured shares. Despite these quarterly fluctuations in product sales, we are encouraged by several long-term trends, including: (1) revenue from higher-margin services like the App Store, iCloud, and Apple Pay, which are growing faster than the overall business, driving better revenue visibility and higher free-cash-flow (FCF) margins; (2) continued gains in global market share in smartphones, wearables, and other hardware categories; and (3) consistent returns of capital to shareholders via share repurchases and dividends. On top of these trends in the core business, Apple is thoughtfully investing in new categories like augmented reality, search, financial services, and streaming media content. We took advantage of weakness in the quarter to add to our position in Apple.”

12. Hormel Foods Corporation (NYSE:HRL)

Number of Hedge Fund Holders: 18

Bill & Melinda Gates Foundation Trust’s Equity Stake: $83.49 Million

Dividend Yield 3.60%

Hormel Foods Corporation (NYSE:HRL) is a consumer defensive company that develops, processes, and distributes meat, nuts, and other food products to retail food services and commercial customers.

Hormel Foods Corporation (NYSE: HRL) is one of Bill Gates’ top dividend stocks with a 31-year payout history. The company currently pays a $0.28 quarterly dividend with a 3.60% dividend yield. Bill & Melinda Gates Foundation Trust has held stakes in Hormel Foods Corporation (NYSE:HRL) since Q4 2022, valued at $83.49 million as of Q3 2023.

By the end of Q3 2023, 18 hedge funds in Insider Monkey’s database disclosed holdings in Hormel Foods Corporation (NYSE:HRL), a decrease from the 24 funds in the previous quarter. The combined value of these holdings is $245.3 million.

11. Danaher Corporation (NYSE:DHR)

Number of Hedge Fund Holders: 103

Bill & Melinda Gates Foundation Trust’s Equity Stake: $92.54 Million

Dividend Yield 0.42%

Danaher Corporation (NYSE:DHR) is a healthcare company that designs, manufactures, and sells medical industrial and commercial products and services.

Bill & Melinda Gates Foundation Trust has held stakes in Danaher Corporation (NYSE:DHR) since 2022 and was worth $92.54 million as of Q3 2023. While the company has paid dividends for 28 years, it currently pays a quarterly dividend of $0.24 a share on a yield of 0.42%.

At the end of the third quarter of 2023, 103 hedge funds in the database of Insider Monkey held stakes worth $7.90 billion in Danaher Corporation (NYSE:DHR), compared to 89 in the preceding quarter worth $6.39 billion.

Here is what Baron Health Care Fund said about Danaher Corporation (NYSE:DHR) in its Q3 2023 investor letter:

“We added to Danaher Corporation (NYSE:DHR), which recently completed the spinoff of its non-life sciences businesses to become a pure-play life sciences tools company. Although near-term trends in the bioprocessing market remain challenging, we like the long-term growth drivers in this business and think Danaher is well positioned.”

10. United Parcel Service, Inc. (NYSE:UPS)

Number of Hedge Fund Holders: 42

Bill & Melinda Gates Foundation Trust’s Equity Stake: $117.70 Million

Dividend Yield 4.13%

United Parcel Service, Inc. (NYSE:UPS) is a package delivery company providing transportation and delivery logistics, contract logistics, and ocean freight.

The robustness of United Parcel Service, Inc. (NYSE:UPS)‘s core business has allowed it to pay dividends for 22 years. Its yield is 4.13%, one of the highest in Gates’ portfolio, backed by a quarterly dividend of $1.62. Bill & Melinda Gates Foundation Trust increased its stakes in United Parcel Service, Inc. (NYSE:UPS) by 2% in Q3 2023 to $117.70 million.

At the end of the third quarter of 2023, 42 hedge funds in the database of Insider Monkey held stakes worth $1.84 billion in United Parcel Service, Inc. (NYSE:UPS), compared to 47 in the preceding quarter worth $945.51 million.

Among the hedge funds being tracked by Insider Monkey, Viking Global is a leading shareholder in United Parcel Service, Inc. (NYSE:UPS), with 6.66 million shares worth more than $1.04 billion.

In its Q3 2023 investor letter, ClearBridge Investments highlighted a few stocks, and United Parcel Service, Inc. (NYSE:UPS) was one of them. Here is what the fund said:

“A higher-for-longer rate mentality taking hold was a headwind for economically sensitive stocks. Rising wages have been one of the main drivers of inflation, and this has proved to be a sticky area, keeping the Fed’s attention and weighing on share prices. For example, United Parcel Service, Inc. (NYSE:UPS) renegotiated a wage increase for its union-backed workforce this summer, which weighed on margins that were already being constricted by slowing volumes. While the new union deal will dampen profits over the next 12 months due to the front-end-loaded nature of the new five-year contract, management gained increased flexibility to deploy automation, which we think should further enhance UPS’s strong competitive position and provide a long-term tailwind to profitability.”

9. FedEx Corporation (NYSE:FDX)

Number of Hedge Fund Holders: 67

Bill & Melinda Gates Foundation Trust’s Equity Stake: $406.48 Million

Dividend Yield 2.05%

FedEx Corporation (NYSE:FDX) is an industrial company that provides transportation, e-commerce, and business services. FedEx Corporation (NYSE:FDX) is best known for offering express transportation, trim packages, ground delivery, and freight transportation services.

FedEx Corporation (NYSE:FDX) is one of Bill Gates’ top dividend stocks, with an annual yield of 2.05%. At the same time, FedEx Corporation (NYSE:FDX) has paid dividends for 19 years. It currently pays a quarterly dividend of $1.26 a share. Bill & Melinda Gates Foundation Trust has held stakes in FedEx Corporation (NYSE:FDX) since 2012, worth $406.48 million as of Q3 2023.

FedEx Corporation (NYSE:FDX) was a part of 67 hedge fund portfolios at the end of Q3 2023, up from 62 in the previous quarter, as per Insider Monkey’s database. The stakes owned by these hedge funds have a collective value of over $2.95 billion.

8. Walmart Inc. (NYSE:WMT)

Number of Hedge Fund Holders: 80

Bill & Melinda Gates Foundation Trust’s Equity Stake: $484.61 Million

Dividend Yield 1.48%

Walmart Inc. (NYSE:WMT) is a consumer defensive investment play in Gates’ portfolio that operates retail wholesale and other units worldwide. Walmart Inc. (NYSE:WMT) operates supercenters, supermarkets, hypermarkets, warehouse clubs, and cash and carry stores that generate revenues for paying dividends.

The retailer has paid dividends for 34 years, at the back of increasing profits and market share benefiting from solid consumer spending power. Walmart Inc. (NYSE:WMT) currently pays a quarterly dividend of $0.57 a share with a yield of 1.48%. Bill & Melinda Gates Foundation Trust has been buying and selling shares in Walmart Inc. (NYSE:WMT) since 2012 and held stakes worth $484.61 million in Q3 2023.

During the third quarter of 2023, Walmart Inc. (NYSE:WMT) attracted considerable interest from hedge funds, with 80 hedge funds having positions in the company, according to Insider Monkey’s database. The collective holdings of these hedge funds amounted to over $5.95 billion. Noteworthy is the fact that Fisher Asset Management, led by Ken Fisher, emerged as the leading shareholder, with holdings valued at around $1.46 billion.

7. Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF)

Number of Hedge Fund Holders: 10

Bill & Melinda Gates Foundation Trust’s Equity Stake: $487.48 Million

Dividend Yield 3.19%

Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) is a beverage company that manufactures and sells non-alcoholic beverages. Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) is one of the oldest dividend aristocrats in the Bill & Melinda Gates Foundation Trust portfolio, having paid dividends for 59 years. The impressive record stems from strong demand for the company’s sparkling soft drinks, flavors, and plant-based beverages.

The Gates Foundation has held stakes in Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) since 2012, worth $487.48 million as of Q3 2023. It currently pays a quarterly dividend of $0.46 per share, backed with a 3.19% yield.

As of 2023’s third quarter, 10 of the 910 hedge funds surveyed by Insider Monkey had held a stake in the firm. Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF)’s largest hedge fund investor after the Gates Foundation is Keith Meister’s Corvex Capital with $36.41 million stake.

6. Ecolab Inc. (NYSE:ECL)

Number of Hedge Fund Holders: 53

Bill & Melinda Gates Foundation Trust’s Equity Stake: $883.94 Million

Dividend Yield 1.17%

Ecolab Inc. (NYSE:ECL) is a basic materials company that provides water hygiene, infection, and prevention solutions and services.

Ecolab Inc. (NYSE:ECL) has been paying dividends for the past 85 years, having raised payouts for 30 years. Ecolab Inc. (NYSE:ECL) currently pays a $0.57 quarterly dividend and boasts a 1.17% dividend yield. Bill & Melinda Gates Foundation Trust held stakes worth $883.94 million as of Q3 2023.

As of the close of Q3 2023, 53 hedge funds in Insider Monkey’s database reported having stakes in Ecolab Inc. (NYSE:ECL), down from 56 in the previous quarter. The consolidated value of these stakes is $2 billion.

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