The Wesfarmers (ASX:WES) share price is trading on a forecast 2.78% fully franked dividend yield

How does the retail conglomerate stack up for its dividends?

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The Wesfarmers Ltd (ASX: WES) share price has gained 35% since this time last year. This comes as the retail conglomerate enjoys improved trading conditions despite COVID-19 affecting Australia鈥檚 wider economy.

During Thursday鈥檚 trading session, Wesfarmers shares touched a new all-time high of $66.16. At market close, its shares finished the day up 1.73%, trading at $65.99.

Why is the Wesfarmers share price pushing higher?

Investors are pushing up the Wesfarmers share price despite no market-sensitive news coming from the company since July.

According to its last update, Wesfarmers proposed a takeover to acquire 100% of Australian Pharmaceutical Industries Ltd (ASX: API). The $687 million offer came as the retail conglomerate seeks to further diversify its growing portfolio with entry into the pharmaceutical market.

The news sent Wesfarmers shares flying from the time of the release and in the following weeks.

However, the API board recently rejected the offer, indicating that the proposal undervalued the business.

At this stage, Wesfarmers has not increased its bid to API shareholders.

How much is Wesfarmers forecasted to pay in dividends?

With the company scheduled to report its full-year results on 27 August, investors may be wondering about the dividend payments.

Wesfarmers paid a fully franked dividend of 88 cents per share in March for the first half of FY21, slightly below the 95 cents in the prior period (FY20). That dividend payment comprised 77 cents along with a special dividend of 18 cents per share.

Goldman Sachs is forecasting a total FY21 dividend payment of $1.84 cents, implying a 96 cents per share final dividend payment. This would give Wesfarmers a fully-franked current dividend yield of 2.78%. Not a bad return when including the strong Wesfarmers share price rise.

The company has a price-to-earnings (P/E) ratio of 39.37 and commands a market capitalisation of roughly $74.8 billion.

Should you invest $1,000 in Wesfarmers right now?

Before you consider Wesfarmers, you'll want to hear this.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. 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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