Guarding against inflation, these three dividend stocks, as chosen by Bill Gates, serve as his financial safeguard.
Unveiling the Bill & Melinda Gates Foundation's Top Picks: Inflation-Proofing a Fortune
Step into the world of one of the largest private foundations globally, the Bill & Melinda Gates Foundation. Although the power couple calls it quits on their marriage, they keep it professional at the foundation. The Bill & Melinda Gates Foundation Trust, managing the wealth and finances, employs external investment managers. Every quarter, Gates discloses the investments, and the latest reveals three standout choices for inflation protection. Surprisingly, tech only takes up 1.33% of the portfolio, with the financial sector leading the way at over 50%.
Amidst the turbulent market landscape: high inflation, tight monetary policy, and uncertainties caused by the ongoing Ukraine conflict, investors are flocking to safe havens such as dividend stocks. Guess who's in on that? The Bill & Melinda Gates Foundation Trust, according to Yahoo Finance.
Trash Talk: Waste Management - Cash is King
Waste Management, the largest private waste company in the US, claims around 15% of Gates' portfolio. The company operates many recycling facilities and landfills. Guess what? Waste will always be here in abundance, no matter the economic conditions. Their thriving business model is reflected in the dividend, with a 19-year streak of annual increases, offering out almost a billion dollars last year. A strong free cash flow promises continued payouts in the future. So far this year, the stock has seen a 14% rise compared to many others, and an impressive 540% growth over the past decade. The forecast for this fiscal year? Revenue could surge by 28% to €19.38 billion and earnings per share by 36% to €5.57.
Construction Boom: Caterpillar - Time to Build
Caterpillar makes up an 8% share of Gates' portfolio. The company, the world's largest manufacturer of construction equipment, is indeed feeling the supply chain disruptions. But, there's a silver lining: the infrastructure projects sparked by US President Biden's recent $1.2 trillion law will undoubtedly benefit Caterpillar. The company has boosted its dividend for 28 consecutive years. This fiscal year, revenue might swell by 27% to €54.88 billion, with earnings per share rising by 31% to €12.36. In just three years, the stock has shot up by around 70%.
Constant Cravings: Walmart - Food Forever
Walmart takes up 2.28% in the Gates portfolio. Known as the world's largest company by revenue, it has proven its ability to continue operation even amidst the coronavirus pandemic. Walmart stands tall as a dividend heavyweight, with a commendable 49-year history of consistent dividend increases. The current yield hovers at 1.71%. This fiscal year (ending on 31.01.2023), revenue could rise by a whopping 20% to €587.29 billion, and earnings per share by 6% to €5.73.
While the Bill & Melinda Gates Foundation invests to support its various initiatives, such as public health and global development projects, specific investment details are rarely disclosed publicly. However, data suggests that during inflationary times, investments in Treasury Inflation-Protected Securities (TIPS), real estate, and commodities can be effective inflation-protection strategies. Keep an eye on this foundation's smart moves in the financial world!
- Despite Melinda and Bill Gates' separation, their shared foundation's investment approach remains focused, as evidenced by their latest quarter's three top picks for inflation protection.
- Interestingly, even amid the tech-heavy investment landscape, the financial sector dominates the Bill & Melinda Gates Foundation Trust's portfolio, accounting for over 50% of their holdings.
- In the realm of dividend stocks, Waste Management, the largest private waste company in the US, captures about 15% of Gates' portfolio, providing a steady source of income with its 19-year streak of annual dividend increases.
- Caterpillar, the world's largest manufacturer of construction equipment, makes up 8% of the foundation's holdings and is poised to benefit significantly from US President Biden's recent infrastructure law.
- The retail giant Walmart, known for its revenue dominance, accounts for 2.28% of the Bill & Melinda Gates Foundation's investments and has a commendable history of consistent dividend increases.
- Personal-finance enthusiasts might find inspiration from exploring the foundations' strategic investments, such as their potential use of Treasury Inflation-Protected Securities (TIPS) and real estate as inflation-protection strategies during uncertain economic conditions.
