What is the Wesfarmers (ASX:WES) dividend worth in November?

What kind of dividend is this blue-chip share offering today? We take a look

| More on:
Girl looks through microscope at money

Image source: Getty Images

As one of the oldest blue-chip shares on the S&P/ASX 200 Index (ASX: XJO), Wesfarmers Ltd (ASX: WES) has amassed a reputation as a solid and reliable payer of dividends over many decades.

Last year that was an extremely difficult one for a number of ASX shares for obvious reasons. As such, many, including the ASX banks, were forced to slash their dividend payments. But Wesfarmers was not among that number.

The company managed to keep its biannual dividends flowing last year, and even shelled out a special dividend in October 2020.

Today, the Wesfarmers share price has lost 1.08% at the time of writing and is sitting at $58.76 a share. That’s down more than 11% from the new all-time high of $67.20 that we saw back in late August.

But as every dividend investor would know, a lower share price means a higher starting dividend yield for any new investment.

So what exactly is the Wesfarmers dividend worth in November 2021?

Breaking down the Wesfarmers dividend

Wesfarmers’ last two dividends were an interim payment of 88 cents per share that investors received in March and a 90 cents per share payment that hit bank accounts on 7 October last month.

If we plug that $1.78 in total dividends into the current Wesfarmers share price, we get a trailing yield of 3.03%. That grosses up to 4.33% if we include Wesfarmers’ full franking.

That’s arguably not too shabby, considering the current record low-interest-rate environment.

But what about the future? After all, just because a company has paid a certain dividend in the past does not at all guarantee it will do so in the future.

Well, as my Fool colleague Tristan covered earlier this week, one broker who reckons investors could be treated to even higher dividends next year is UBS.

UBS is anticipating Wesfarmers to grow its annual dividend for FY 2022 to $1.83 per share, up a healthy 2.8% from FY 2021’s $1.78 per share. If that turned out to be true, it would give this ASX 200 blue chip a forward yield of 3.12% on the current Wesfarmers share price.

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

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

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Wesfarmers wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor Sebastian Bowen 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.

More on Share Market News