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Should you buy Wesfarmers Ltd shares at this price?

The Wesfarmers Ltd (ASX: WES) share price hasn’t done much over the past few years, is it a buy today?

In-case you didn’t know, Wesfarmers is a conglomerate that owns a number of businesses including Coles, Bunnings, Kmart, Officeworks and the Australian Target.

Here are my reasons why you should and shouldn’t buy Wesfarmers shares:

Buy case

I think the best reason to consider investing in Wesfarmers is its impressive and pretty reliable dividend. The dividend has grown every year since the GFC and the grossed-up yield is currently 7.59%.

Wesfarmers has grown earnings per share nicely since the GFC and it could keep doing so as long as Australia doesn’t suffer a recession.

Management are supposedly considering divesting its retail businesses of Kmart, Target and Officeworks. This would leave Wesfarmers with businesses that should be able to keep growing over the long-term.

Sell case

If Wesfarmers doesn’t divest its retail businesses then Amazon could take a big chunk out of its earnings and the share price.

I think it’s more likely that Australia will have a bit of a dip soon rather than another decade of growth. Wesfarmers would not be able to avoid a recession.

Wesfarmers is not exactly cheap trading at 16x FY18’s estimated earnings.

Foolish takeaway

I think the best reason to sell Wesfarmers, or not buy it, is that there are better options out there for your money.

Some better options are likely to be our top growth shares for 2017.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of 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 Bruce Jackson.

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