If you're looking to invest in a diversified Australian business with broad retail operations and one that traditionally pays dividends, Wesfarmers Ltd. (ASX: WES) is worth a look.
Established in 1914, Wesfarmers Ltd. (ASX: WES) is a major Australian retail conglomerate selling chemicals, fertilisers, industrial wares and safety products. It is based in Perth, Western Australia and its main markets are Australia and New Zealand. It is one of Australia's largest earning companies and reported a revenue of $30.8 billion for 2020. It employs a staff of 107,000, making it one of the largest private employers in Australia.To buy shares listed in Australia such as Wesfarmers, you'll need to sign up to a broker with access to the ASX. Our table can help you compare share trading platforms and choose. Then follow these steps.
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| 52-week range | $45.0835 - $68.55 |
|---|---|
| 50-day moving average | $66.1886 |
| 200-day moving average | $56.6929 |
| Target price | $58.97 |
| PE ratio | 29.638 |
| Dividend yield | $1.94 (2.96%) |
| Earnings per share (TTM) | $2.21 |
The technical analysis gauge below displays real-time ratings for the timeframes you select. However, this is not a recommendation. It represents a technical analysis based on the most popular technical indicators: Moving Averages, Oscillators and Pivots. Finder might not concur and takes no responsibility.
Historical closes compared with the last close of A$66.79
| 1 week (2024-04-23) | 2.34% |
|---|---|
| 1 month (2024-03-28) | -2.35% |
| 3 months (2024-02-01) | 15.12% |
| 6 months (2023-11-01) | 30.91% |
| 1 year (2023-05-01) | 28.29% |
|---|---|
| 2 years (2022-04-29) | 35.18% |
| 3 years (2021-04-30) | 23.43% |
| 5 years (2019-05-01) | 86.62% |
Valuing Wesfarmers stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of Wesfarmers's overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.
Wesfarmers's current share price divided by its per-share earnings (EPS) over a 12-month period gives a "trailing price/earnings ratio" of roughly 30x. In other words, Wesfarmers shares trade at around 30x recent earnings.
That's relatively low compared to, say, the P/E ratio for the ASX over the 12 months to December 2019 (32.14). The low P/E ratio could mean that investors are pessimistic about the outlook for the shares or simply that they're under-valued.
Wesfarmers's EBITDA (earnings before interest, taxes, depreciation and amortisation) is $4.3 billion (£2.2 billion).
The EBITDA is a measure of a Wesfarmers's overall financial performance and is widely used to measure stock profitability.
| Revenue TTM | $43.7 billion |
|---|---|
| Operating margin TTM | 9.38% |
| Gross profit TTM | $14.3 billion |
| Return on assets TTM | 8.65% |
| Return on equity TTM | 30.35% |
| Profit margin | 5.74% |
| Book value | 7.419 |
| Market capitalisation | $74.3 billion |
TTM: trailing 12 months
Environmental, social and governance (known as ESG) criteria are a set of three factors used to measure the sustainability and social impact of companies like Wesfarmers.
When it comes to ESG scores, lower is better, and lower scores are generally associated with lower risk for would-be investors.
Total ESG risk: 15.98
Socially conscious investors use ESG scores to screen how an investment aligns with their worldview, and Wesfarmers's overall score of 15.98 (as at 12/31/2018) is excellent – landing it in it in the 11st percentile of companies rated in the same sector.
ESG scores are increasingly used to estimate the level of risk a company like Wesfarmers is exposed to within the areas of "environmental" (carbon footprint, resource use etc.), "social" (health and safety, human rights etc.), and "governance" (anti-corruption, tax transparency etc.).
Environmental score: 7.35/100
Wesfarmers's environmental score of 7.35 puts it squarely in the 5th percentile of companies rated in the same sector. This could suggest that Wesfarmers is a leader in its sector terms of its environmental impact, and exposed to a lower level of risk.
Social score: 8.36/100
Wesfarmers's social score of 8.36 puts it squarely in the 5th percentile of companies rated in the same sector. This could suggest that Wesfarmers is a leader in its sector when it comes to taking good care of its workforce and the communities it impacts.
Governance score: 5.27/100
Wesfarmers's governance score puts it squarely in the 5th percentile of companies rated in the same sector. That could suggest that Wesfarmers is a leader in its sector when it comes to responsible management and strategy, and exposed to a lower level of risk.
Controversy score: 2/5
ESG scores also evaluate any incidences of controversy that a company has been involved in. Wesfarmers scored a 2 out of 5 for controversy – the second-highest score possible, reflecting that Wesfarmers has, for the most part, managed to keep its nose clean.
Wesfarmers Ltd was last rated for ESG on: 2019-01-01.
| Total ESG score | 15.98 |
|---|---|
| Total ESG percentile | 10.76 |
| Environmental score | 7.35 |
| Environmental score percentile | 5 |
| Social score | 8.36 |
| Social score percentile | 5 |
| Governance score | 5.27 |
| Governance score percentile | 5 |
| Level of controversy | 2 |
Dividend payout ratio: 2.03% of net profits
Recently Wesfarmers has paid out, on average, around 2.03% of net profits as dividends. That has enabled analysts to estimate a "forward annual dividend yield" of 2.96% of the current stock value. This means that over a year, based on recent payouts (which are sadly no guarantee of future payouts), Wesfarmers shareholders could enjoy a 2.96% return on their shares, in the form of dividend payments. In Wesfarmers's case, that would currently equate to about A$1.94 per share.
While Wesfarmers's payout ratio might seem low, this can signify that Wesfarmers is investing more in its future growth.
The latest dividend was paid out to all shareholders who bought their shares by 19 February 2024 (the "ex-dividend date").
Wesfarmers's shares were split on a 9.827:10 basis on 25 November 2014. So if you had owned 10 shares the day before the split, the next day you would own 9.827 shares. This wouldn't directly have changed the overall worth of your Wesfarmers shares – just the quantity. However, indirectly, the new 1.8% higher share price could have impacted the market appetite for Wesfarmers shares which in turn could have impacted Wesfarmers's share price.
Over the last 12 months, Wesfarmers's shares have ranged in value from as little as $45.0835 up to $68.55. A popular way to gauge a stock's volatility is its "beta".
Beta measures a share's volatility in relation to the market. The market (AU average) beta is 1, while Wesfarmers's is 0.766. This would suggest that Wesfarmers's shares are less volatile than average (for this exchange).
Wesfarmers Limited engages in the retail business in Australia, New Zealand, and internationally. The company is involved in the retail sale of building materials, home and garden improvement, lifestyle, and outdoor living products; apparel and general merchandise, including toys, leisure, entertainment, home, and consumables; and office products and solutions, such as stationery, technology, furniture, art supplies, and learning and development resources, as well as print and create, and technical support services through its Officeworks stores. It also provides hardware and software repairs, system security solutions, wireless and wired networking services, virus and spyware prevention and removal, and data backup and recovery solutions. In addition, the company manufactures and supplies ammonia, ammonium nitrate, and industrial chemicals; manufactures, imports, and distributes phosphate, nitrogen, and potassium-based fertilizers; supplies polyvinyl chloride resins; produces wood-plastic composite products; and manufactures and distributes sodium cyanide. Further, it produces and distributes liquefied petroleum gas and liquefied natural gas; supplies and distributes maintenance, repair, operating products, and industrial safety products and services; manufactures and markets industrial, medical, and specialty gases and equipment; supplies tools, safety gear, personal protective equipment, electricals, work wear, and industrial supplies; and provides risk management and compliance services, as well as footwear; safety products, uniforms, engineering supplies, and packaging services; and engages in other businesses. Additionally, the company provides health, beauty, and wellbeing products and services; clinical cosmetic and skin care treatments; retail support services; distributes pharmaceutical goods; and operates online marketplace and data sharing platform. Wesfarmers Limited was founded in 1914 and is headquartered in Perth, Australia.
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