At the current Wesfarmers Ltd (ASX: WES) share price, I think there are better places to invest your money.
Bear in mind, however, that I have been saying the Wesfarmers share price looks expensive for more than two years now.
Here's how Wesfarmers Ltd shares have performed relative to the Australian market, or S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).
That chart does not include dividends – Wesfarmers shares yield a dividend around one percent per year more than the market, or S&P/ASX 200.
As can be seen in the chart above, it would be fair to say that Wesfarmers shares have not done a great deal over the past two years. Unfortunately, I think it will be more of the same for the foreseeable future. Here's why…
Coles is no longer primed for growth.
Coles is a great business, don't get me wrong, but expecting it to continue growing profits as it has done in recent years might not be a good idea. In response to Coles' ongoing dominance, Woolworths Limited (ASX: WOW) appears to have lowered its margins to compete more effectively. In its most recent half-year financial report, Coles' profit went backwards.
Valuation
Wesfarmers is a great company, with many strong brands like Coles, Bunnings Warehouse, Kmart, Target and more, under its control. However, no business is worth an infinite price. And at today's levels, I think Wesfarmers Ltd shares are priced to perfection.
Foolish Takeaway
Wesfarmers is a good business, so I would be very reluctant to sell my shares, if I held any. However, at today's prices it is not a standout buy in my book. You could do worse, of course. But with more than 2,000 companies on the ASX you can afford to be picky.
