At a $127 billion net worth, Bill Gates has the financial pedigree to attract the attention of any growth- and profit-minded investor. As the fifth-wealthiest individual in the world, according to the Bloomberg Billionaires Index, Gates doesn’t actually manage his own portfolio on a day-to-day basis. But stock selection for his portfolio eventually benefits his ample philanthropic causes through the Bill & Melinda Gates Foundation.
Steering billions of dollars into causes like global climate change, technology advancement, malaria vaccines, and education and financial literacy, Gates takes his funding sources seriously. Given the success of Cascade Asset Management Co. — which oversees Cascade Investment LLC, holder of Gates’ personal assets, as well as the Bill & Melinda Gates Foundation Trust — maybe you should take his stock picks seriously, too.
[Sign up for stock news with our Invested newsletter.]
These seven stocks were holdings of the Bill & Melinda Gates Foundation Trust as of June 30, according to its latest 13F filing with the Securities and Exchange Commission on Aug. 14. Vetting these stocks on your own is a final step toward investing the Bill Gates way:
| Stock | Portfolio Weight |
| Microsoft Corp. (ticker: MSFT) | 31.8% |
| Berkshire Hathaway Inc. (BRK.B) | 20.4% |
| Canadian National Railway Co. (CNI) | 15.8% |
| Waste Management Inc. (WM) | 14.5% |
| Caterpillar Inc. (CAT) | 4.3% |
| Deere & Co. (DE) | 3.8% |
| Ecolab Inc. (ECL) | 2.3% |
Microsoft Corp. (MSFT)
As Microsoft co-founder Bill Gates did, taking a sizable stake in one of the most profitable companies in the world can give your stock portfolio a solid backbone. Closing at $316.88 per share on Aug. 17, Microsoft is up over 33% year to date and comes with a handy 0.85% dividend yield.
The company is widely known for its line of personal computer software products, cloud computing applications and more recently artificial intelligence, with its multibillion-dollar investment in OpenAI, the ChatGPT-creating AI research laboratory for which Elon Musk sat on the original board of directors.
Microsoft has already made inroads incorporating ChatGPT into its Bing search engine. It has rolled out a generative AI product called Copilot which, for $30 per month, can aid users in creating AI-informed documents and presentations.
With a blend of old and new, Microsoft is building a powerhouse profit-making model that could definitely earn a place in your investment portfolio.
Portfolio weight: 31.8%
Berkshire Hathaway Inc. (BRK.B)
The Gates Foundation Trust’s biggest move in the second quarter was adding 27% to its position in Warren Buffett’s Berkshire Hathaway, moving to an $8.6 billion stake in Q2. The decision blends good business sense and strategic familiarity, as the two billionaires are close friends who reportedly have each other’s phone numbers on speed dial. As of Aug. 17, BRK.B shares are up 14.3% in 2023.
On Aug. 5, Buffett showed what he does best, with Berkshire Hathaway delivering stellar quarterly results, reinforcing the company’s reputation as both a cash-generating machine and a reliable “safe spot” for long-term investment. In particular, Berkshire’s heavy investment in major insurance companies like Aon PLC (AON), Geico and more recently Alleghany Corp., at an $11.6 million purchase price, have been solid. Insurance companies are known as steady cash generators, and Berkshire has cornered the market on some of the biggest and best insurance brands in the world.
Portfolio weight: 20.4%
[Read: The Complete Berkshire Hathaway Portfolio]
Canadian National Railway Co. (CNI)
At 15.8% of the Gates Foundation Trust’s portfolio, Canadian National Railway is its third-largest holding. The railway company embodies the term “expansive,” with 20,000 miles of rail touching the U.S. East and West coasts and the Gulf of Mexico. The company opened the year with good news for shareholders in the form of an 8% dividend hike, though the stock is down 3.8% in 2023 as of Aug. 17.
The Gates Foundation Trust has significantly expanded its CNI holdings over the past decade, boosting its stake in the Montreal-based company from 8.6 million shares in 2013 to 54.8 million shares in mid-2023. A major transporter of business goods across North America every day, CNI is a huge moneymaker and thus a main spoke in the Gates portfolio wheel — especially with that engine-churning 2.8% forward dividend yield.
Portfolio weight: 15.8%
Waste Management Inc. (WM)
Sure, Waste Management has underperformed this year, dialing at a tepid 2% gain year to date as of Aug. 17, compared to the S&P 500’s 14% gain over the same period. Yet there’s much to like about WM, and sector analysts certainly aren’t sweating the company’s underperformance in 2023.
Bank of America Securities’ Michael Feniger reiterated his “hold” call on Waste Management in late July, while Raymond James analyst Patrick Tyler Brown kept his “outperform” rating. The company’s emphasis on environmentally conscious waste management syncs perfectly with Gates’ clean energy vision. Waste Management also has a “wide moat” that keeps competitors at bay. The company also recently boosted its dividend yield to 1.8%, its 20th consecutive annual dividend increase.
Portfolio weight: 14.5%
Caterpillar Inc. (CAT)
This farm and agricultural equipment giant makes up 4.3% of the Gates Foundation Trust portfolio, at about 7.4 million shares. The stock has seen about a 30% gain since May, and it’s up about 7% in the past month. CAT’s share price appreciation is fueled largely by the billions of government-approved dollars flowing into the machinery and construction sector, as well as consumer demand for new housing, given the real estate sector’s thin inventory in 2023.
In the second quarter, Caterpillar’s revenue rose 22% on a year-to-year basis, to $17.3 billion, while its adjusted profit per share skyrocketed 75% in the same time period. Gates likes industry leaders that can keep growing and delivering dividends. With a 1.9% yield and no end to its growth prospects, Caterpillar certainly fits the “Bill” here.
Portfolio weight: 4.3%
Deere & Co. (DE)
Deere & Co., one of the largest and most long-running agriculture and construction manufacturing companies in the world, is a Gates Foundation Trust stalwart. The Trust holds 3.9 million shares of DE stock at a cash value of $1.6 billion. Like most Gates portfolio stocks, DE goes for a premium at $419.16 per share as of Aug. 17, but like Caterpillar, the company is operating in a demand economy for construction and machinery goods, as government infrastructure funds are deployed and the broader economy continues to rebound.
Deere easily bested estimates in Q2 with a revenue boost of 30% on a year-to-year basis compared to analysts’ projection of 20%. Additionally, earnings rose by 42% to $9.65 per share, compared to estimates of 26% earnings growth to $8.58 per share. A solid dividend yield of 1.2% adds some luster to DE stock.
Portfolio weight: 3.8%
Ecolab Inc. (ECL)
Another of the heftier plays in the Gates Foundation Trust, at 5.2 million shares valued at $974 million, Ecolab meets Gates’ criteria as a clean energy company with a mission to make the world a greener place. The company specializes in sustainable water, hygiene, and energy technology and services, and it’s a moneymaker, too.
In early August, Barclays analyst Manav Patnaik issued a “hold” call and set a target price of $200 per share for ECL stock. And its share price of $180.99 on Aug. 17 is a leap from its $45 level in 2010, when it first joined the Gates lineup. It’s no surprise that the world’s largest cleaning and sanitation company is a pillar in the Gates Foundation Trust portfolio, but it’s something of an eye-opener to see how well it’s performed since the Trust bought it 13 years ago.
Portfolio weight: 2.4%
More from U.S. News
8 Best Warren Buffett Stocks to Buy in 2023
Billionaire George Soros’ 7 Top Stock Picks in 2023
7 Stocks Cathie Wood is Buying
Bill Gates Portfolio: 7 Best Stocks to Buy Now originally appeared on usnews.com
Update 08/18/23: This story was previously published at an earlier date and has been updated with new information.
