In times of inflation it is necessary to find firms that generate a recurring income stream. That is why the founder of Microsoft, Bill Gates, has three dividend shares in his portfolio for it according to Jing Pan in Yahoo Finance.
Dividend stocks are a way to diversify a portfolio that may be chasing growth too obsessively. They generate income through thick and thin and, particularly important today, in times of high inflation. US consumer prices increased 8.5% in July from a year earlier.
They also tend to outperform the S&P 500 over the long term.
One notable portfolio that has a large number of dividend stocks belongs to The Bill & Melinda Gates Foundation Trust. Since the trust is used to pay for so many initiatives, the income must continue to flow into it.
Dividend stocks help make this happen.
It’s not the most glamorous industry, but waste management is essential.
Whatever happens to the economy, municipalities have no choice but to pay companies to dispose of our mountains of trash, even if those costs go up.
As one of the biggest players in the space, Waste Management remains in an entrenched position.
The shares have more than doubled in the past five years. And management is projecting 10% revenue growth for the year.
Currently offering a 1.5% yield, Waste Management’s dividend has increased 19 years in a row.
The company has paid out nearly $1 billion in dividends over the past year, and its free cash flow of about $2.5 billion for 2021 means investors shouldn’t have to worry about getting their checks.
Waste Management closed on Friday at $173.37 and the latest moving average crossover, the 70-period moving average above the 200-period moving average, would give us a bullish signal. Meanwhile, Ei indicators are mostly bullish.
As a company whose fortunes often follow that of the broader economy (that will be when its equipment is a fixture on construction sites around the world), Caterpillar finds itself in an intriguing position post-pandemic.
The company’s revenue is feeling the effects of a crippled global supply chain, but still record-low interest rates and President Joe Biden’s recently signed $1.2 trillion infrastructure bill mean there could be a huge amount of construction in the US in the near future.
Caterpillar’s mining and energy businesses also provide exposure to commodities, which tend to do well in times of high inflation.
The company’s shares have pushed commodity and oil prices up more than 55% in the past five years.
After announcing an 8% increase in June, Caterpillar’s quarterly dividend is currently $1.20 per share and offers a 2.5% yield. The company has increased its annual dividend for 28 consecutive years.
Caterpillar said goodbye last week at $189.50 with a gap to the upside and the 70-period moving average is above the last candlestick. Meanwhile, Ei indicators are mostly bearish.
With grocery stores deemed essential businesses, Walmart was able to keep its more than 4,700 US stores open during the pandemic.
Not only has the company increased both profits and market share since COVID coughed across the planet, but its reputation as a low-cost haven makes Walmart the go-to retailer for many consumers when prices are rising.
Walmart has steadily increased its dividend for the last 49 years. His annual payout is currently $2.24 per share, which translates to a 1.6% dividend yield.
Walmart closed the last session of last week at $136.88 and the 200-period moving average is above the last candle. Meanwhile, the Ei indicators are mixed.