Wesfarmers Ltd (ASX: WES) is one of the ASX's best dividend stocks for the long term.
After all, few 100-year-old Australian companies could say they're still growing at a healthy clip, like Wesfarmers.
Three reasons to bank on Wesfarmers
While I've previously said Wesfarmers shares are too expensive to warrant a 'buy' rating for prudent value investors, there are many reasons to continue holding Wesfarmers shares if you already own some, or to start a position when prices drop. Here are three of my favourite:
Data sourced from Annual Reports.
Unlike its number one rival Woolworths Limited (ASX: WOW), Wesfarmers' Coles supermarkets are growing profits at a healthy rate thanks to its expanding margins and revenue growth.
- Bunnings, Officeworks and Kmart.
Data sourced from Annual Reports.
Wesfarmers' three major retail businesses outside of Coles: Kmart, Bunnings and Officeworks; provide significant organic growth potential and diversification for the company.
- The dividend yield of 5.07% fully franked.
Data sourced Annual Reports.
Thanks to the recent fall in share price, Wesfarmers' shares now trade on a dividend yield of 5.07% – that's 7.24% grossed up!
Should you Buy, Hold or Sell?
Barring any unforeseen catastrophes, Wesfarmers will still be around for another 5 years, 10 years and maybe even 20 years. Therefore, if you plan on holding shares with an eye till 'forever', you may consider building a position in the stock today.
However, if you are – like me – investing for such a long time, why not wait for the share price to drop before buying shares at a more compelling valuation?
