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.
