Wesfarmers Ltd (ASX: WES) shares have long been a staple for mum and dad investors as well as professional money managers.
And for good reason.
Over the past century, the conglomerate has established itself as a key player in Australia's business landscape.
Now, with the company's share price gaining about 25% so far this year, Westfarmers' valuation exceeds $100 billion.
As such, the ASX giant has joined an elite club of Australian 'hectocorns', or companies worth more than $100 billion.
Only five other ASX-listed companies enjoy hectocorn status: Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), CSL Ltd (ASX: CSL), National Australia Bank Ltd (ASX: NAB), and Westpac Banking Corp (ASX: WBC).
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Long way to the top
Wesfarmers, originally known as The Western Farmers Limited, was formed in 1914 to assist farmers and grow markets.
It was conceived as a way to address economic imbalances and help rural workers achieve better pay and conditions.
The company's direction soon shifted, and a decade later, Wesfarmers was branching into media as the owner of WA's first commercial radio station, 6WF.
Wesfarmers has since expanded into energy, retail, chemicals, and lithium.
Today, Wesfarmers also owns numerous household brands, including Bunnings, K-Mart, Target, Officeworks, and Priceline.
The company listed on the ASX in 1984 with a valuation of $30 million.
Wesfarmers is Australia's sixth most valuable publicly traded company, four decades later.
The conglomerate achieved the $100-billion valuation milestone when its shares traded above $88.15 on Wednesday.
Wesfarmers shares are changing hands for about $89.21 at the time of writing, with the company's market cap exceeding $101 billion.
Foolish Takeaway
Wesfarmers has defied analyst expectations and outpaced the S&P/ASX 200 Index (ASX: XJO) with the conglomerate's shareholders enjoying solid gains so far this year.
It's not the first time Wesfarmers has beaten the market and bucked forecasts.
The company's leaders have long touted the potential gains on offer by investing in Wesfarmers.
In fact, just over 20 years ago, I recall Wesfarmers Chairman Michael Chaney urging a packed audience to scoop up as many Wesfarmers shares as they could and hold them for as long as possible.
Chaney, who was CEO at the time, explained the powers of compounding and the benefits of reinvesting dividends.
He demonstrated how $10,000 invested in Wesfarmers could grow into $1 million over time.
Those who followed Mr Chaney's advice have done well.
For a junior reporter with a bank balance barely able to absorb the cost of a Bunnings hot dog, owning a piece of Wesfarmers was certainly out of reach.
Still, the lesson was valuable.
