In 2023, Make Easy Money Passive Income Like Bill Gates


This blog post is aimed at showing you how to build a dividend stock portfolio for passive income. Ideally, we’d like to find companies that have demonstrated sustained profitability across multiple fiscal years. Even so, both revenues and dividends have increased consistently over time.

Should You Invest in Dividend Stocks for Passive Income?

If you’re looking to boost your portfolio’s returns and supplement your passive income, dividend stocks are a terrific option. To avoid making a costly mistake, investors should look into more than just dividend yields when considering a company for investment. The Bill and Melinda Gates Foundation Trust has a notable portfolio that is rich in dividend stocks.

Dividend Stocks Held by the Bill & Melinda Gates Foundation

Waste Management (WM)

Waste Management (WM) is one of the dividend stocks held by the Bill & Melinda Gates Foundation. The stock’s dividend yield is 1.82%. P/E (TTM, trailing 12-month) is now at 28.58. Its PEG ratio is 3.27. As PEG rises above 1, the stock becomes less attractive to prospective investors looking for bargain. When dividends are factored in, the PEGY ratio is 2.71. Despite being lower than the PEG, the value is still greater than 1. Nonetheless, the stock provides the Foundation with a consistent stream of dividend income and share price appreciation over time. 

Walmart (WMT)

Another dividend stock on the books is Walmart (WMT). The current dividend yield of the stock is 1.56%. The trailing 12-month price-to-earnings ratio is currently at 44.36. It has a PEG ratio of 10.21. Any PEG ratio above 1 makes a stock less appealing to value investors. The dividend-adjusted PEGY ratio is 7.51. When compared with Waste Management, Waste Management’s stock is more appealing to investors due to its lower PEGY ratio. Despite this, Walmart has consistently proven to be a sound investment. It pays out a dividend, and its share price rises over time.

How Do You Find Dividend Stocks for Passive Income on Your Own?

Using the PEGY ratio, you can find dividend-paying stocks that will give you a steady stream of passive income. The PEGY ratio is not without its limitations. The growth rate is based on the company’s forecasts rather than actual growth. Therefore, there is no assurance that the ratio is a reliable indicator of future results.

Since this is the case, it is prudent to be conservative when estimating a business’s potential for future earnings growth. To check if the projected rate of growth is sustainable, we compared it to the average rate of growth during the preceding five years. After verifying that everything adds up properly, we may settle on the dividend yields we desire. The savings rate is roughly 3%, given the current state of the market. Therefore, we will be hunting for dividend stocks that pay out at least 3% every year.

To proceed with the scenario, we want to find equities with a PEGY ratio below 1 and a dividend yield of at least 3% every year. Fortunately, there is no shortage of online resources that provide stock screeners, which facilitate this type of research. With a PEGY ratio of less than 1 and a dividend yield of at least 3% in mind, we arrived at the following list of 37 dividend-paying stocks:

SymbolCompany NameSecurity TypeSecurity PriceDividend YieldP/E (TTM)PEGY Ratio
TDToronto-Dominion Bank (The)Common Stock69.694.067.40.58
UNMUnum GroupCommon Stock42.463.116.50.53
BGSFBGSF IncCommon Stock15.493.8711.60.48
EEni SpADepository Receipt31.715.713.30.09
COPConocophillipsCommon Stock115.064.647.90.56
CNQCanadian Natural Resources LtdCommon Stock60.614.115.90.33
XOMExxon Mobil CorpCommon Stock119.173.0590.30
MPWMedical Properties Trust IncCommon Stock (REIT)12.099.595.80.35
SUSuncor Energy Inc.Common Stock34.274.526.10.17
SHGShinhan Financial Group Co LtdDepository Receipt32.66.915.30.37
KBKB Financial Group IncDepository Receipt44.136.605.30.43
SQMSociedad Quimica y Minera de Chile SA SoqimichDepository Receipt93.
NFGNational Fuel Gas CoCommon Stock58.583.2490.68
PXDPioneer Natural Resources CoCommon Stock231.3911.268.20.23
DVNDevon Energy CorpCommon Stock63.548.146.70.18
WESWestern Midstream Partners LPUnit Trust Fund28.267.0810.40.45
UGPUltrapar Participacoes SADepository Receipt2.56.1115.60.51
BMOBank of MontrealCommon Stock101.434.245.10.49
PSXPhillips 66Common Stock107.383.914.60.14
TROXTronox Holdings plcCommon Stock16.
NEPNextEra Energy Partners LPUnit Trust Fund72.354.4912.90.40
CTRACoterra Energy IncCommon Stock25.079.935.10.24
TNLTravel Plus Leisure CoCommon Stock41.463.869.50.61
JWNNordstrom Inc.Common Stock21.653.5110.80.54
NFENew Fortress Energy IncCommon Stock40.0115.0029.90.16
BAPCredicorp LtdCommon Stock127.13.328.60.47
BNPQYBNP ParibasDepository Receipt34.128.439.90.47
DBSDYDBS Group Holdings LtdDepository Receipt108.20853.8613.80.71
KNBWYKirin Holdings Co LtdDepository Receipt15.573.1818.30.49
NHYDYNorsk Hydro ASADepository Receipt7.948.645.40.16
NHYKFNorsk Hydro ASACommon Stock8.07258.705.40.16
SCGLYSociete Generale GroupDepository Receipt5.646.2715.20.54
PBAPembina Pipeline CorpCommon Stock34.925.527.30.39
YYJOYY IncDepository Receipt34.855.8550.16
WFWoori Financial Group IncDepository Receipt30.068.533.50.19
MNSOMINISO Group Holding LtdDepository Receipt15.7611.8836.70.71
TPGTPG IncCommon Stock32.383.2180.57

It is up to you to do the research necessary to pick which stocks to include in your dividend stock portfolio.

Example: Toronto-Dominion Bank (TD) for Passive Income

In terms of dividend stocks for a passive income portfolio, Toronto-Dominion Bank (TD) is a strong contender.

In terms of dividend stocks for a passive income portfolio, Toronto-Dominion Bank (TD) is a strong contender. It has a cheap P/E and a PEGY ratio of 0.58 in addition to a high dividend yield (over 4% annually). The combination of these factors makes the stock a valuable investment. It’s possible that shareholders will benefit from both the annual dividend and the long-term appreciation of their investment. Before making any investment, it is important to do your own research. This is merely a test run of the analysis done to find stocks that satisfy the specified criteria.

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