Bill Gates is using these dividend stocks right now to generate a phat stream of income to fight inflation — you might want to do the same for the rest of 2023

With many pundits anticipating continued tough times for the stock market, it might be time to look into dividend stocks for the remainder of 2023.

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Dividend stocks are a way to diversify a portfolio that might be a little too obsessive about growth. They generate income in good times, bad times and, most importantly today, in times of high inflation. (US consumer prices rose 6.4% year over year in January.)

They also tend to outperform the S&P 500 over the long term.

A prominent portfolio rich in dividend stocks is owned by the Bill & Melinda Gates Foundation Trust. With the trust used to pay for so many initiatives, revenue must continue to flow into it.

Dividend stocks help make that possible.

Here are three dividend stocks that occupy a significant place in the foundation’s holdings.

Waste management (WM)

It’s not the most glamorous of industries, but waste management is an essential one.

No matter what happens to the economy, communities have no choice but to pay companies to get rid of our piles of trash, even as those costs increase.

As one of the biggest players in this space, Waste Management remains in an established position.

Shares are up 75% over the past five years. In 2022, operating income grew 9.9% year over year.

Waste Management’s dividend, which currently yields 1.9%, is up for 20 straight years.

The company paid out $1.08 billion in dividends last year, and its free cash flow of around $2 billion for 2022 means investors needn’t worry receive their checks.

The story goes on

caterpillar (CAT)

As a company whose fortunes normally follow those of the larger economy – which will happen when your equipment is permanently installed on construction sites around the world – Caterpillar is in an intriguing post-pandemic position.

The company’s revenue is feeling the effects of a paralyzed global supply chain, but President Joe Biden’s $1.2 trillion infrastructure bill means there could be a great deal to be built in the US in the near future.

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Caterpillar’s mining and energy business also offers exposure to commodities, which tends to do so perform well in times of high inflation.

The company’s shares are up more than 50% over the past five years on higher commodity and oil prices.

After announcing an 8% increase in June 2022, Caterpillar’s quarterly dividend currently stands at $1.20 per share and offers a 1.9% yield. The company has increased its annual dividend for 28 straight years.

Walmart (WMT)

Because grocery stores are considered essential businesses, Walmart has been able to keep its more than 4,700 U.S. stores open during the pandemic.

Not only has the company increased both profits and market share since COVID spread around the world, but its reputation as a low-cost port makes Walmart the retailer of choice for many consumers when prices rise.

Walmart has steadily increased its dividends for the past 50 years. Its annual payout is currently $2.28 per share, which translates to a 1.7% dividend yield.

Walmart is currently trading at $137 per share, below its 52-week high of $160.77 set in April 2022.

A better way to generate income?

Of course, buying dividend stocks isn’t the only way to generate investment income.

In the midst of hot inflation and an uncertain economy, millionaire moguls are finding creative ways to effectively invest their millions.

Prime commercial real estate, for example, has outperformed the S&P 500 over a 25-year period. With the Help from new platforms, these types of opportunities are now available to retail investors. Not just the ultra-rich.

With a single investment, investors can own institutional-grade properties leased by brands like CVS, Kroger, and Walmart — and accumulate a stable grocery-anchored income On a quarterly basis.

This article is informational only and should not be construed as advice. It is provided without any guarantee.