July 21, 2024

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Bill Gates invests 87% of his wealth in these five stocks

Bill Gates invests 87% of his wealth in these five stocks

Spread is important. This is what Bill Gates does: he holds positions in dozens of companies. However, only five companies represent the vast majority of its portfolio. Which one are they?

Bill Gates is best known as the co-founder of Microsoft, which he led for a quarter of a century. Now his focus is on his philanthropic and philanthropic work. Gates’s wealth currently stands at about $131 billion, making him the eighth richest person in the world, according to Forbes.

Gates signed the Giving Pledge with Warren Buffett. In which he decided to donate almost all of his wealth to charity. To this end, he created a charitable foundation, the Bill & Melinda Gates Foundation (soon to become the Gates Foundation).

With his wealth, he wants to create a world where everyone has the opportunity to live a healthy and productive life. The American website wrote that the fund has interests in dozens of companies, but 87% of them consist of only five stocks Motley Fool.

1. Microsoft: 35%

No. 1 on the list is no surprise: Microsoft. Gates created the foundation with much of his personal stake in the company he created. The Gates Foundation owns approximately 36.5 million shares of Microsoft stock, worth $15.47 billion.

Microsoft is currently making progress with Azure Cloud, which has become the No. 2 provider in cloud infrastructure. Additionally, the results are enhanced by Copilot, an artificial intelligence (AI)-based digital assistant. According to analysts at Evercore ISI, generative AI could generate $143 billion in additional revenue by 2027.

The trust benefits from a dividend that Microsoft has paid consistently since 2004 and has increased annually since 2011.

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The modest 0.71% yield is a result of strong price increases of 226% over the past five years, which has left the S&P 500 far behind. What’s more, a payout ratio of less than 25% ensures there’s plenty of room for earnings growth in the coming years.

2. Berkshire Hathaway: 16%

The fund’s second largest holding is Berkshire Hathaway. This is another result of Warren Buffett’s promise to donate his enormous fortune to charity. One of those charities is the Gates Foundation. Spread over 16 years, Buffett’s contributions totaled $36 billion.

As a result, the fund currently owns more than 17.3 million shares of Berkshire, a stake valued at approximately $7.1 billion. Berkshire Hathaway is a group of companies that provides the necessary diversification immediately. It is a very strong company. Last year was a record for the insurers in the portfolio. In total, its insurance companies accounted for 40% of Berkshire’s $37 billion in revenue.

3. Waste management: 16%

Buffett and Gates also share an appreciation for boring companies with repetitive, predictable activities. This applies to waste management. One person’s trash is another person’s treasure. Perhaps that’s why the Gates Trust owns more than 35.2 million shares worth $7.1 billion.

Waste collection and recycling is one of the pillars of waste management, and thus achieves strong results. Waste Management recently announced that it would acquire medical waste services company Stericycle for $7.2 billion. In addition, the waste processor provides strong profits.

The waste management company has increased its dividend for 15 years in a row, and the current yield is 1.5%. With a payout ratio of less than 47%, there is plenty of room for further increases.

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4. Canadian National Railway: 15%

In addition, Gates and Buffett have more similarities. What about their common interest in railways? Buffett once said that railroads move goods in a very cost-effective way and do so in a very environmentally friendly way.

Gates Trust owns 54.8 million shares of Canadian National Railway stock, worth approximately $6.97 billion. Canadian National is the only railway in North America connecting the Pacific Ocean, the Atlantic Coast, and the Gulf of Mexico.

Despite recent weakness, an improving economy and increased rail traffic volume bode well for the company in the long term. Canadian National also pays dividends with a strong track record. The current dividend yield is 1.9% and the payout ratio of 38% offers upside potential.

5. Caterpillar: 5%

The Gates Foundation’s Fifth Company is another standout company. Gates Trust owns more than 7.3 million shares worth more than $2.4 billion. Caterpillar is the world’s largest supplier of construction and mining equipment, and has been under pressure in recent months due to the unstable economic situation.

The company’s strength lies in the diversity of its activities. Caterpillar’s revenues were flat compared to last year, but cost savings led to higher margins and increased profitability. In addition, Caterpillar has a proven track record of winning payments.

Caterpillar has paid a dividend every year since its founding in 1925 and a quarterly dividend every year since 1933. Caterpillar has increased its dividend every year for 30 years, and its dividend payout ratio of just 23% offers the potential for further increases.

It is also interesting: 10 essential investing tips from Warren Buffett

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