Posted on Nov. 9, 2008

Microsoft (MSFT) founder Bill Gates is the richest, the second-richest or the third-richest man in the world, depending on what month it is. Lucky for us, his investment portfolio is a matter of public record.

Gates' trading vehicle is called Cascade Investments. Stockpickr has gone through the list of his stockholdings and compiled a portfolio of the Bill Gates stocks with the highest yields.

One of the highest-yielding stocks that Bill Gates owns is Otter Tail (OTTR), a Minnesota-based electric utility that also has such diverse businesses as manufacturing polyvinyl chloride and polyethylene pipes, wind towers, handling trays, horticultural containers, diagnostic medical equipment, patient monitoring equipment and dehydrated potato products. The company just reported diluted earnings per share of 31 cents for the third quarter of 2008 vs. 44 cents for the third quarter of last year. The stock has a P/E of 18, a PEG of 2.08 and a yield of 5.6%.

Otter Tail also shows up in an interesting Stockpickr portfolio called Windy Picks, made up of companies for which wind energy comprises at least a portion of their business. The portfolio also contains Brookfield Asset Management (BAM), with a 2.9% yield; FPL Group (FPL), with a 3.9% yield; and General Electric (GE), with a 6.2% yield.

Another high-yielder owned by Gates is PNM Resources (PNM), which is in the business of generating, transmitting and distributing electricity and natural gas in New Mexico and Texas. It just reported earnings per diluted share of 27 cents in the third quarter, down from 46 cents in the same period last year. The stock has a forward P/E ratio of 14 and a PEG ratio of 6.03, and it pays a generous yield of 5.4%.

PNM is in the portfolio of the Lord Abbett Small-Cap Value Y Fund , which is rated five stars by Morningstar. This open-end fund, which invests at least 80% of its net assets in equity securities of small companies in the Russell 2000, has had an average annual return of 18.86% over the last three years. The fund also owns Quanex (NX), the vehicle and building products company, which has a yield of 1.2%, and Black Hills (BKH), an electric utility that serves South Dakota, Wyoming and Montana, yielding 5.5%.

Republic Services (RSG) is another Gates dividend stock. The company is in the nonhazardous solid waste collection and disposal services business. FBR Capital Markets recently cut revenue and per-share earnings estimates for the company. The stock has a P/E of 15, a PEG of 1.08 and a yield of 3.2%.

Republic is also owned by Rockefeller Financial Services, a $2.8 billion investment fund based in New York City, which also owns Exxon Mobil (XOM) yielding 2.2%; Chevron (CVX), yielding 3.5%; and Wal-Mart Stores (WMT). yielding 1.8%.

For more ideas, check out the Stockpickr.com portfolio of high-yield stocks owned by Bill Gates , which includes two that have yields of more than 5%.

For all the stocks that Bill gates owns, check out the Cascade Investments portfolio.