Major premier blue-chip ASX shares like Wesfarmers Ltd (ASX: WES) are a very popular choice for income-seeking investors.
The conglomerate has strong defensive qualities thanks to its highly diversified portfolio. It has exposure to some of Australia's strongest retail brands, including Kmart and Bunnings. But also has operation office supplies, health and wellbeing, industrials, chemicals, energy, and even more.
But as a retail business, Wesfarmers is fundamentally cyclical. This means it is sensitive to inflation and interest rates, and subject to the same peaks and troughs as the broader economy.
Take 2026, for example. Wesfarmers shares have come off the boil recently as Australians tighten their purse strings and prepare for ongoing instability.
But the benefit of cyclical stocks is that they usually outperform during economic recoveries.
Another benefit of Wesfarmers shares is the company's sheer size and market dominance. At the time of writing, the business is the 6th largest company listed on the ASX with a market cap of around $98 billion.
The company is well-established and financially sound with a history of reliable growth and stability.
For example, for the first half of FY26, the conglomerate posted a 9.3% increase in NPAT, to $1.6 billion. And while the company acknowledges that inflation and higher operating expenses could remain as headwinds going forward, it is confident that earnings growth will continue.
It's this stability and long-term, consistent net profit growth that enable Wesfarmers to pay its shareholders reliable, consistent passive income.
But what exactly does that passive income look like?
Let's investigate.
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How many Wesfarmers shares can I get for $5,000?
At the time of writing, Wesfarmers shares are $86.44 each. That means your $5,000 investment will buy you around 57 shares.
What dividend does Wesfarmers pay its shareholders?
Wesfarmers traditionally makes two fully-franked dividend payments to shareholders per year, payable in March and October.
In February, the owner of Kmart and Bunnings declared a fully-franked interim dividend of $1.02 per share, up 7.4%.
And as the company's earnings climb, its payout is expected to rise too.
Analysts tip Wesfarmers to pay an annual $2.13 dividend per share for FY26, and then $2.31 in FY27.
Based on the current $86.44 share price, that translates to a forward dividend yield of around 2.5% for FY26 and roughly 2.7% in FY27.
So, what's the estimated passive income for FY26 and FY27?
Using the estimated payout figures above, we can calculate roughly how much income to expect from a $5,000 investment in Wesfarmers shares.
If the conglomerate pays the expected $2.13 per-share dividend in FY26, your 57 shares would generate $121.41 in passive income.
Assuming Wesfarmers then pays the forecasted $2.31 dividend in FY27, those 57 shares would generate another $131.67 in passive income for the year.
Does that mean Wesfarmers shares are a good buy for passive income?
The outlook for Wesfarmers shares is currently quite reserved. Market Index data shows that the majority of brokers have a hold rating on the stock. The average $78.83 target price implies a potential 9% downside ahead, at the time of writing.
But as I mentioned above, Wesfarmers is a cyclical stock with strong defensive qualities. I think that once inflation begins to subside and the economy improves, Wesfamers will be one of the first businesses to benefit.
In the meantime, I think its market dominance and long history of dividend payments make it a compelling passive-income play.
