Is the Wesfarmers share price a buy?

86

Wesfarmers share price

Is the Wesfarmers Ltd (ASX: WES) share price a buy?

The old conglomerate is one of the best ASX blue chips to consider in my opinion. It has been operating for over a century and show no signs of stopping its evolution.

One of the main things I appreciate about Wesfarmers is that it’s very focused on shareholder returns.

Although the decision to pay the $1 special dividend per share a few months ago wasn’t easy, it was a good outcome for shareholders. The idea of opening Bunnings in the UK was a good try, but shutting it was probably also the right call for shareholders.

I also appreciate that Wesfarmers is willing to be flexible in the types of businesses that it owns. Whilst it does have a slant towards retail businesses at the moment with Bunnings, Officeworks, Kmart and Target, I like that Wesfarmers management aren’t afraid to sell businesses or buy new ones – such as online business Catch Group and lithium business Kidman Resources Ltd (ASX: KDR).

My point is that the future is even more uncertain these days, so I would prefer owning a business that has the flexibility of changing its earnings base, rather than one stuck as a bank or a supermarket.

I also appreciate the fact that Wesfarmers management are trying to bring Bunnings up to digital retailing offering standards by rolling out online Bunnings shopping by the end of the year.

If the Australian economy is going to go on a more promising course with the tax cuts, RBA interest rate cut and APRA change then Wesfarmers could be one of the businesses to benefit due to its national presence of its various chains of stores. 

Foolish takeaway

Wesfarmers is currently trading at 21x FY20’s estimated earnings. I don’t think this is the best time to buy Wesfarmers shares, but I’d much rather buy it for dividend income over the big banks at the current prices.

Other options to consider for high-quality dividend income are these top ASX shares.

Top 3 ASX Dividend Shares For 2019

With interest rates likely to stay at rock bottom for months (or YEARS) to come, income-minded investors have nowhere to turn… except dividend shares. That’s why The Motley Fool’s top analysts have just prepared a brand-new report, laying out their top 3 dividend bets for 2019.

Hint: These are 3 shares you’ve probably never come across before.

They’re not the banks. Not Woolies or Wesfarmers or any of the “usual suspects.”

We think these 3 shares offer solid growth prospects over the next 12 months. The first two currently offer fat, fully franked yields. The last is a surprising REIT offering you the benefits of being a landlord with none of the hassle! You’ll discover all three names and codes in “The Motley Fool’s Top 3 Dividend Shares for 2019.”

Even better, your copy is free when you click the link below. Fair warning: This report is brand new and may not be available forever. Click the link below to be among the first investors to get access to this timely, important new research!

The names of these top 3 dividend bets are all included. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies move – we may be forced to remove this report.

Click here to claim your free copy right now!

More reading

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019

 

Here’s how you can strike it rich in the share market…

The best way to strike it rich in the share market is to buy shares that are not only cheap, but growing quickly.

Combining countless hours of research with over 30 years of hands-on stock market investing experience, The Capital Club’s founder Bruce Jackson has just published his definitive list of 3 Cheap and Good ASX Stocks for 2018.

Best of all, the report is absolutely free, exclusively for readers of The Capital Club.

In this comprehensive free report, you’ll find the name of one ASX gold stock that’s not only profitable, but trading at less than 4 times forecast profits.

You’ll also discover the name of a company one fund manager has called the cheapest stock in the ASX 100, and you’ll read about the three catalysts that could push the share price higher in the next six months.

Finally, the report names one of the cheapest retailers trading on the ASX, a company that just picked up the assets of a distressed competitor on the cheap, paying just 2 times earnings. No wonder one top fund manager thinks its share price could at least double.

With the share prices of each of these 3 companies having the potential to double or more, you’ll want to act now. Simply click here or the button below, enter your email address, and this free report will be instantly sent to you.

See the 3 stocks