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While some billionaires prefer to stay out of the spotlight, Bill Gates is not one of them. He is best known for his role as one of the founders and former CEOs of Microsoft, which he ran for a quarter of a century, though he has also established his place in history through his philanthropic and philanthropic activities.
According to Forbes, Gates is currently worth $131 billion (as of this writing), making him the ninth-richest person in the world, though Gates has stated that he plans to eventually donate nearly all of his wealth to charity. The Bill & Melinda Gates Foundation was established to support philanthropic causes, with the stated goal of “creating a world where everyone has the opportunity to live a healthy and productive life.”
To that end, the trust has donated nearly $54 billion to address the world’s toughest and most pressing problems, including disease and poverty, since 2000. The trust is financed in a portfolio of stocks in dozens of companies, 87% of which is made up of just these five stocks.
Investors shouldn’t be surprised that Microsoft stock is the Gates Foundation’s largest asset, especially since Gates used most of his personal assets to start the foundation. The trust owns about 36.5 million shares, valued at $15.47 billion.
Microsoft has expanded beyond its traditional software and operating systems, and now Microsoft Azure is the fastest-growing cloud infrastructure provider, outpacing its cloud competitors. Copilot’s AI-powered digital assistants can also improve financial results. Analysts have calculated that generative AI could generate $143 billion in incremental revenue by 2027.
The trust earns reliable income through Microsoft’s dividend, which has been paid consistently since 2004, and has increased annual payments since 2011. The seemingly paltry 0.71% return is the result of the stock’s impressive 226% gain over the past five years, far outperforming the 87% gain for the S&P 500. Furthermore, a payout ratio of less than 25% ensures there’s plenty of room for dividend growth in the coming years.
The trust’s second-largest holding is Berkshire Hathaway, with the trust currently owning more than 17.3 million shares of Berkshire, valued at nearly $7.1 billion. Berkshire’s business interests include 67 subsidiaries and equity stakes in more than 32 other companies, providing the necessary diversification to make it an attractive investment vehicle when capital is needed. Last year, Berkshire’s revenue grew 20% annually to $364 billion, with net profits of $97 billion. Moreover, Berkshire is fairly prudent, with $189 billion in cash and cash equivalents on its balance sheet.
The trust owns more than 35.2 million shares of Waste Management, valued at $7.1 billion. Trash collection and recycling are the backbone of Waste Management’s business, and they have delivered strong results and higher profits despite the recent economic downturn. Waste Management is also looking to expand.
The company recently announced plans to acquire medical waste services provider Stericycle for $7.2 billion. The acquisition will help the trust expand its presence in the environmental solutions sector. Waste Management has raised its dividend for 15 consecutive years and currently yields 1.5%. With a payout ratio of just under 47%, there is plenty of room for continued growth.
The trust owns 54.8 million shares of Canadian National Railway, valued at approximately $6.97 billion. The railway is the only transcontinental railway in North America, connecting the Pacific Coast, Atlantic Coast, and Gulf of Mexico. Additionally, railcars are four times more fuel efficient than off-road trucks, reducing greenhouse gas emissions by 75%. Despite recent weakness, an improving economy and increasing rail volumes bode well for the company’s long-term success. The company has a strong record of dividend payments, with consistent payments since 2011. With a current yield of 1.9% and a payout ratio of 38%, stability is the definition of a strong potential.
Gates’ fifth-largest holding is another iconic business. As the world’s leading supplier of construction and mining equipment, Caterpillar has been affected by economic uncertainty in recent months, but the company’s strength lies in the diversity of its business lines, which include industrial gas turbines, diesel-electric locomotives, and diesel and gas engines. The Gates Trust owns more than 7.3 million shares, worth more than $2.4 billion.
While Caterpillar’s sales are currently flat year over year, cost controls are improving margins and helping to boost profitability. The company has paid a dividend every year since its founding in 1925 and has paid a quarterly dividend every year since 1933. The dividend currently yields 1.6%.
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