Bill Gates is using these dividend stocks to generate a giant inflation-fighting income stream — you might want to do the same
With elite investors like Michael Burry and Jeremy Grantham predicting a reckoning for today’s overheated stock market, it might be time to look at dividend stocks.
Dividend stocks are a way to diversify a portfolio that may be chasing growth a little too obsessively. They generate income in good times, bad times and, particularly important today, times of high inflation.
They also tend to outdo the S&P 500 over the long run.
One prominent portfolio that’s heavy on dividend stocks belongs to The Bill & Melinda Gates Foundation Trust. With the trust being used to pay for so many initiatives, income needs to keep flowing into it.
Dividend stocks help make this happen.
Here are three dividend stocks that occupy significant space in the foundation’s holdings. You may even be able to follow in its footsteps with some of your spare change.
Waste Management (WM)
It’s not the most glamorous of industries, but waste management is an essential one.
No matter what happens with the economy, municipalities have little choice but to pay companies to get rid of our mountains of garbage, even if those costs increase.
As one of the biggest players in the space, Waste Management remains in an entrenched position.
The shares have more than doubled over the past five years and are up about 42% year to date. Management is projecting 15% revenue growth this year.
Currently offering a yield of 1.4%, Waste Management’s dividend has increased 18 years in a row.
The company has paid out almost $1 billion in dividends over the last year, and its roughly $2.5 billion in free cash flow for 2021 means investors shouldn’t have to worry about receiving their checks.
As a company whose fortunes typically follow that of the larger economy — that’ll happen when your equipment is a fixture on building sites the world over — Caterpillar is in an intriguing post-pandemic position.