Of all the blue-chip stocks on the S&P/ASX 200 Index (ASX: XJO), Wesfarmers Ltd (ASX: WES) shares are one of my personal favourites.
I've owned Wesfarmers shares for a number of years now, and don't ever plan on selling. In fact, I'd love to add to my position as much as possible going forward.
Not only that, I happen to think Wesfarmers is an ASX 200 investment that would be a great buy for any ASX portfolio.
There are a couple of reasons for this confidence.
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Why I would recommend Wesfarmers shares to any ASX investor
Firstly, Wesfarmers has a long track record of delivering for its shareholders. Wesfarmers shares have been on the ASX for many decades. Over this time, it has consistently been able to grow its earnings base, as well as deliver an increasing output of dividend income for shareholders.
In the 2020 financial year, Wesfarmers generated $30.85 billion in revenues and $1.7 billion in net profits. By the 2024 financial year, those metrics had swelled to $44.9 billion and $2.56 billion, respectively.
This enabled Wesfarmers to go from paying out $1.70 worth of dividends over 2020 to the $1.98 per share that investors have enjoyed over 2024. Judging by this company's past, I have faith that these returns will continue well into the future.
Secondly, Wesfarmers shares offer ASX investors an extraordinary amount of diversification for one ASX company. Wesfarmers is hardly a household name in Australia, but many of the company's subsidiary brands are. They include Bunnings, Kmart, Target, and Officeworks.
In addition to these quality brands, Wesfarmers has significant operations in industries ranging from workwear, lithium, gas distribution, fertilisers, chemical manufacturing, and building products.
This is a company that tends to change and morph over time. Ten years ago, it owned Coles Group Ltd (ASX: COL) in its entirety. But today, Wesfarmers' ownership of Coles is a distant memory, with the company now boasting other businesses like Covalent Lithium and pharmacy chain Priceline as some of its major investments.
All in all, Wesfarmers shares have a highly diversified earnings base that reaches into many corners of the Australian economy. This makes Wesfarmers a very powerful business and a prudent investment, in my view.
Foolish takeaway
At almost $70 each currently, I wouldn't exactly call Wesfarmers shares a screaming bargain. However, the markets are still very close to their record highs, so it's not surprising to see a stock of Wesfarmers' calibre looking expensive.
Despite this, I still think this company is worth a look for any investor with a long-term mindset.
