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MSFT, CNI, CAT - >>> Billionaire Bill Gates Has Over Half of His $42 Billion Portfolio Invested in These 3 Dividend Stocks


by Keith Speights

Motley Fool

March 10, 2024


https://finance.yahoo.com/news/billionaire-bill-gates-over-half-185000568.html


Do billionaires like dividend stocks? Absolutely. Just take a look at the holdings of famous billionaire investors such as Warren Buffett and Ken Griffin. They're loaded with dividend stocks.

Bill Gates stands out as another great example. Although he doesn't manage a public company or hedge fund like Buffett and Griffin do, he's donated a boatload of money to the Bill & Melinda Gates Foundation Trust. And over half of this charitable foundation's $42 billion portfolio is invested in these three dividend stocks.


1. Microsoft

It should come as no surprise that Microsoft (NASDAQ: MSFT) remains Gates' favorite stock. After all, he co-founded the technology company along with Paul Allen and led it for years. Microsoft ranks as the top holding for the Gates Foundation Trust by far, making up 33.98% of its total portfolio at the end of 2023.

Many tech companies don't pay dividends, but Microsoft is an exception. The company initiated a dividend program in 2003. Over the last 10 years, Microsoft has increased its dividend payout by nearly 168%. Its dividend yield, though, is still only 0.74%.

One key reason why the yield is so low is that Microsoft's share price has soared. The stock has been a 10-bagger over the last 10 years and is up almost 60% over the last 12 months.


2. Canadian National Railway

The Gates Foundation isn't just betting on tech stocks such as Microsoft. Canadian National Railway (NYSE: CNI) ranks as its third-largest holding, making up nearly 16.3% of the total portfolio.

Canadian National Railway isn't limited to just Canada. It has 20,000 or so miles of rail that transport products in the middle part of the U.S. as well. The company also offers transportation and logistics services in addition to rail operations.

The transportation company has increased its dividend for 28 consecutive years, most recently boosting its dividend payout by 7% in the first quarter of 2024. Its dividend yield currently stands at 1.94%.


3. Caterpillar

Caterpillar (NYSE: CAT) is the fifth-largest position for the Gates Foundation. It makes up 5.14% of the total portfolio. That brings the combined weight of these three dividend stocks to 55.41%.

The Gates Foundation has owned Caterpillar since the fourth quarter of 2005. However, the last time it added shares of the equipment manufacturer was back in the fourth quarter of 2013. The most recent transaction involving Caterpillar came in 2022 Q1, with the sale of roughly 24% of the foundation's stake in the company.

Caterpillar has generated nice dividend income for the Gates Foundation through the years. The company has paid a dividend every quarter since 1933 and has increased its payout for 29 consecutive years. Its dividend now yields 1.55%.

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