Bill Gates is Using These Dividend Stocks to Generate a Giant Inflation-Fighting Income Stream ⁠— You Might Want to Do The Same

Dec 10, 2021

With top investors such as Michael Burry and Jeremy Grantham anticipating a reckoning for today's overvalued stock market, maybe it's time to pay attention to dividend stocks.

Dividend stocks are an excellent method to diversify an overly focused portfolio on growth. They earn money in good times, poor times, and, most importantly now, during periods of excessive inflation.

They also outperform the S&P 500 in the long run.

The Bill and Melinda Gates Foundation Trust, for example, has an extensive dividend stock portfolio. Because the trust is used to fund so many activities, money must continue to flow into it.

This way of cooperating has become possible by dividend stocks.

Here are three dividend equities that make up the bulk of the foundation's holdings. With a little more cash, you might be able to follow in its footsteps.

Waste Management (WM)

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Waste management isn't the most attractive of industries, but it's necessary.

Whatever the economy does, towns will have no choice but to pay corporations to remove our piles of waste, even if those costs rise.

Waste Management maintains its position as one of the most influential businesses in this industry.

The shares have more than doubled in value over the last five years and are up roughly 42% this year. This year, management expects a 15% increase in sales.

Waste Management's dividend has climbed for 18 years in a row, currently yielding 1.4 percent.

The business has paid out about $1 billion in dividends in the previous year. Its free cash flow forecast for 2021 is around $2.5 billion, so investors shouldn't be concerned about receiving their checks.

Caterpillar (CAT)

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Caterpillar is in an unusual post-pandemic position as a corporation whose fortunes often follow those of the more excellent economy — which is inevitable when your equipment is a staple on construction sites all around the world.

The company's revenues are suffering due to a stalled global supply chain. Still, historically low-interest rates and President Joe Biden's recently enacted $1.2 trillion infrastructure program indicate that there will be a lot of construction in the United States in the near future.

Caterpillar's mining and energy activities also offer commodity exposure, which tends to perform well during periods of high inflation.

The company's shares have risen over 15% this year as a result of increasing raw material and petroleum costs.

Caterpillar's quarterly dividend is now at $1.11 per share, with a yield of 2.2 percent, following a rise of 8% in June. For the past 27 years, the corporation has raised its yearly dividend.

Walmart was permitted to keep its more than 1,700 stores being opened in the United States operational during the epidemic because grocery stores were classified as critical enterprises.

Walmart's reputation as a low-cost haven makes it many consumers' go-to retailers when prices are rising nowadays. Not only has the company increased profits and market share since COVID coughed its way across the globe.

Over the last 45 years, Walmart has gradually boosted its dividends. Its current annual dividend distribution is $2.20 per share, resulting in a 1.6 percent dividend yield.

Walmart is now trading at about $136 per share, after a slight downward trend over the last month. If that's still too much, you may acquire a smaller portion of the firm using a popular app that allows you to buy as much as you can with your budget.

At the end of the day, stocks, even those that pay dividends, are fundamentally volatile. And not everyone is comfortable with having assets that fluctuate dramatically week to week.

Take a look at these if you want to invest in something that isn't affected by the stock market's ups and downs.

Investing in fine art, commercial real estate, or even maritime finance has always been reserved for the ultra-wealthy, such as Gates. But these types of opportunities are now available to ordinary investors as well, thanks to new platforms.