What: Blue-chip conglomerate Wesfarmers Ltd (ASX: WES) has experienced a share price decline of just over 9% in the past 12 months to leave the stock at $40. That's not quite its one-year low of $38.45, but it is getting close!
So What: Given that the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is down 9.4% over the past year, the performance of Wesfarmers is not too bad. Compared with other blue-chip stocks such as Woolworths Limited (ASX: WOW) and Insurance Australia Group Ltd (ASX: IAG) – down 29.4% and 21.8% respectively – the performance of Wesfarmers' shares could in fact be applauded.
Now What: In what was widely considered a lacklustre reporting season for ASX-listed stocks, Wesfarmers' result was arguably a highlight with the group reporting a 3.8% increase in underlying revenue, an 8.3% increase in net profit after tax, a 9.9% increase in earnings per share to $2.16 and an increase in the full year dividend to $2 per share.
Based on these results, Wesfarmers is currently trading on a price-to-earnings ratio of 18.5 and a fully franked dividend yield of 5%, which looks roughly around fair value compared with the broader market.
Given the heightened levels of market volatility, the continuing low interest rate environment and the low growth economic outlook, conservative investors may certainly find Wesfarmers appealing at these levels.