I was fortunate enough to pick up my first tranche of Wesfarmers Ltd (ASX: WES) shares back in June of 2022. At the time, I thought the share price on offer was too good to pass up. Hindsight has been kind to that view.
Over the subsequent three-and-a-bit years, Wesfarmers has been one of my best ASX performers in my personal portfolio.
My position has roughly doubled since that first purchase. Thanks to Wesfarmers' ever-increasing dividend, my yield on cost is also approaching 7%. Naturally, my only regret is that I didn't buy a whole lot more shares.
Many of the attributes that first attracted me to Wesfarmers shares remain today. This is an incredibly diverse company for one. Wesfarmers is most famous for its high-quality retailers – OfficeWorks, Kmart, Target and, of course, Bunnings Warehouse.
Although these retailers are some of the best in the country, Wesfarmers also has many other businesses in its massive portfolio. These range from mining operations and chemical and fertiliser manufacturing to gas distribution and pharmacies.
From its acquisitions of Priceline and Silk Laser to its spinoff of Coles Group Ltd (ASX: COL), this ASX 200 blue-chip stock has proven time and again that it is a savvy and competent manager of shareholder capital. Hence, my desire to add Wesfarmers shares to my portfolio.
But that was then, and this is now. So, is it time to buy more Wesfarmers shares and rectify my initial mistake of not loading the boat?
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Is it time to buy more Wesfarmers shares after this pullback?
Back in early September, I wrote about Wesfarmers shares and how the $91.81 share price at the time was a huge cause for concern, thanks to what I perceived to be an elevated valuation. At that price, Wesfarmers shares were trading on a price-to-earnings (P/E) ratio of over 35 and a dividend yield of just 2.27%.
Since then, the company has thankfully come off the boil. Those Wesfarmers shares are going for $81.66 today (at the time of writing), which gives Wesfarmers a P/E ratio of 31.6 and a dividend yield of 2.53%.
Whilst this pricing aligns far better with Wesfarmers' growth outlook, at least in my view, it is still nothing close to bargain territory. As such, I won't be buying more Wesfarmers shares right now. It was only back in April that this company was under $70 a share. At that kind of level, I might be more tempted to part with my money. But in my view, $81.66 is still not good enough.
