As investors, we are naturally interested in the content and composition of this foundation's stock portfolio. Bill Gates ought to be closely followed by value- and long-term investors as his close friendship with Warren Buffett is well known. After I reviewed his portfolio, I must admit I was pleasantly surprised to find that almost all of the stocks he controls through the foundation [Berkshire Hathaway (BRK.A) (BRK.B) which constitutes 46.53% of the foundation's portfolio is a notable exception] pay a hefty dividend.
I have chosen the 3 most interesting dividend paying stocks in Bill Gates portfolio. I also believe these stocks are excellent long-term buys.
Fiscal data as of
Jan 31 2012
Dec 31 2012
Dec 31 2012
Net profit margin
Total revenues (USD millions)
Total revenues growth (4 years)
Net income (USD millions)
Net income growth (4 years)
0,54 of 2008 income
Long term debt (USD millions)
Total cash dividends paid (USD millions)
Dividend coverage ratio**
Number of shares 2012/2008
EPS growth rate (4 years)
0,21 of 2008 EPS
*Free Cash Flow = Total cash from operations - Total cash from investing
**FCF / Total cash dividends paid
Why you should own Wal-Mart Stores Inc.
Bill Gates has recently sold his entire stake of Costco (COST) while adding to his holding of Wal-Mart. In my recent article, "Wal-Mart And Costco Compared," I have argued that, while Costco is a great company, Wal-Mart looks like a better buy at the moment. Costco is a wonderful business, no doubt about it. From its financial statements, it can be inferred that it is basically a general merchandise buying cooperative for those in America that are more well off. Costco keeps the margins at 15% and lets membership fees provide its cash flow.
Wal-Mart on the other hand is a significantly different animal. It assumes the place of the largest retail chain in the US which blankets the entire country. Wal-Mart participates in the U.S. GDP with 2.2% and is the largest private employer in the world. That ought to give it some "leverage" with the government (as it has had in Mexico) to the detriment of its competitors. Retailing is a sensitive operation largely because of the question of access to prime locations. Wal-Mart has demonstrated in the past that it can open locations freely in the Mid-West and it is also metastasizing rather well in most coastal cities.
Why you should own BP
BP is the world's second largest "supermajor" (privately owned oil company) after Exxon. I like BP as a geopolitical play. Britain is the United States' first partner in global empire and it is not a coincidence that the largest field developed by BP is in the vicinity of Basra in Iraq. Coastal Basra was the headquarters of the British Army in Iraq during the last war. There is also some new drilling in Libya.
As America's staunchest ally, this London-based company ought to have precedence when global oil reserves are distributed. It has, after all, been able to maintain that precedence since its founding in 1908 as The Anglo-Persian Oil Company.
Why you should own McDonald's
McDonald's is evidently one of the financially soundest companies existing for purchase on the great global stock exchanges today. It is essentially a technology company, providing its franchisees with the know-how of how to efficiently run a fast food operation in exchange for a part of their revenue stream.
McDonald's is also one of the most recognized brands globally. I believe that its logo is the main reason why people flock to McDonald's restaurants in tourist hot-spots worldwide. This traveler's recognition is one of the cornerstones of its success and the main reason of the company's extraordinary global success.