Bill Gates isn’t best known as an investor. As a public figure, he’s better known for founding Microsoft (NASDAQ:MSFT) and for philanthropic efforts. But over the years, Gates has accumulated an investing track record that would be the envy of many professionals. Through his company, Cascade Investment, he owns a diversified portfolio of stocks, private companies, and even farmland. Over the years, Cascade’s portfolio has performed well, propelling Gates to a $139 billion net worth. In this article, I’ll explore Bill Gates’s favourite stock, as indicated by how much of it he owns.
CN Railway Canadian National Railway (TSX:CNR)(NYSE:CNI) is Canada’s largest railway company. It’s primarily a freight railway that ships goods around Canada and the United States. It has a massive rail network that touches on three coasts, giving it an edge in long-distance shipping. Because it transports items over such a wide area, CN is able to move massive amounts of goods — $250 billion worth annually, to be precise. CN mainly ships commodities like grain, coal, and crude oil. It also has an automotive shipping business. The sheer volume of CN’s shipping and the wide array of goods it ships make it a cornerstone of the North American economy.
Bill Gates’s stake As of February 2021, Bill Gates held about 14.28% of CN Railway — a position worth $15 billion. That’s more than 10% of Gates’s net worth, indicating a high level of confidence in the stock. He’s not the only billionaire who’s a big believer in railroads. Warren Buffett famously bought Burlington Northern Sante Fe railroad — 100% of it — and countless investment managers hold big positions in railroads as well. Some of the biggest holders of CN Railway stock are
- Royal Bank of Canada
- TD Asset Management
- The Vanguard Group
- Blackrock (NYSE:BLK)
What this means for investors The significance of Gates’s investment in CN Railway is this: it adds to thesis that CNR is a resilient, growing company that will stand the test of time.
When a billionaire invests their money, they’re not looking to take on huge risk in exchange for a potential reward. Rather, they’re looking for safe-haven assets that will moderately outperform the market over time. In the past decade, that’s exactly what CN has done. In 10 years, CN stock has risen about 450% compared to 263% for the S&P 500. When you add dividends into the equation, the degree of outperformance becomes even greater. It’s a stock that has handsomely rewarded investors who held on for the long term — yet without too much risk. In 2021, with the economy re-opening, it may outperform once more.
The post Bill Gates LOVES This Dividend-Paying Canadian Stock! appeared first on The Motley Fool Canada.
Teresa Kersten, an employee of LinkedIn (NYSE:LNKD), a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Andrew Button owns shares of Canadian National Railway and Microsoft. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of and recommends Canadian National Railway and Microsoft. The Motley Fool recommends Canadian National Railway.
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