Top Billionaires Prefer Dividend Stocks: Bill Gates Foundation Trust Invests in Key Assets

Renowned billionaire investors like Warren Buffett and Ken Griffin are showing an interest in dividend stocks, and Bill Gates is no exception. Though he does not manage a public company or hedge fund, Gates has dedicated a significant portion of the $42 billion portfolio the Bill & Melinda Gates Foundation Trust holds to dividend-paying stocks.

The Foundation Trust has a track record of focusing on investments that match its objectives while yielding profits. Their recent move towards dividend stocks reflects a shift towards more conservative yet lucrative investment strategies.

Gates Diversification Strategy

Microsoft (NASDAQ; MSFT) remains at the top of Gates’ list, making up 33.98% of the trust’s holdings. Despite being a tech powerhouse, Microsoft stands out for its dividend program, which was launched in 2003 and has seen an increase of 168% in dividend payouts over the last decade. However, its dividend yield remains modest at 0.74% due to the stock’s soaring price.

However, Gates isn’t solely focused on tech investments; he has diversified his portfolio.

Canadian National Railway (NYSE; CNI), with its rail network spanning 20,000 miles across the U.S., accounts for 16.3% of the trust’s holdings. With a track record of increasing dividends for 28 consecutive years, Canadian National Railway currently yields 1.94%.

Caterpillar (NYSE; CAT) completes Gates’ top trio of dividend investments, representing 5.14% of the portfolio. The equipment manufacturer has been paying dividends since 1933 and currently has a yield of 1.55%. However, the trust has been decreasing its stake over time.

Should Investors Follow Billionaires’ Footsteps

Is it wise for investors to mimic Gates’ investment strategies? Maybe not. The market is constantly evolving. This means that what worked for billionaires in the past might not be as effective today. While Microsoft could still offer growth opportunities driven by generative AI, Canadian National Railway and Caterpillar may not be the choice for investors seeking growth.

Although Bill Gates’ dividend selections offer stability and earnings, investors need to do their research and consider their personal investment strategies before following his lead.