How does the Wesfarmers (ASX:WES) dividend compare to other ASX 200 blue chips?

asx blue chip shares represented by pile of blue casino chips in front of bar graph

When it comes to the S&P/ASX 200 Index (ASX: XJO), there are few blue-chip shares bluer than Wesfarmers Ltd (ASX: WES). Wesfarmers can be classed as ASX royalty. It’s been around for more than a century, owns (or has owned) some of our most iconic retailing businesses, and is now the eighth-largest ASX 200 share by market capitalisation.

Wesfarmers is also regarded as a solid dividend payer, having paid out fairly consistent biannual dividends for decades now. But things can change, and dividends are never guaranteed. Just ask any shareholder of Westpac Banking Corp (ASX: WBC) what happened to their 2020 interim dividend.

So how do Wesfarmers’ dividend payouts measure up as we begin 2022? Let’s have a look.

What kinds of payouts are we dealing with?

So in 2021, Wesfarmers paid out two dividends. There was the company’s interim dividend of 88 cents per share that was paid out on 31 March. As well as the final dividend of 90 cents a share that investors received in October. Both of these payouts were fully franked, as is usually the case with Wesfarmers.

They were also both improvements over 2020’s dividends, which saw investors receive an interim dividend of 75 cents per share, and a final dividend of 77 cents per share. In saying that, Wesfarmers shelled out a special 18 cents per share dividend that year as well. This reflected the company’s sale of part of its remaining stake in Coles Group Ltd (ASX: COL).

So Wesfarmers’ two 2021 dividends give its shares a trailing yield of 2.97%, based on the current share price of $59.91. So let’s see how that measures up to some other ASX 200 blue-chips.

Well, for starters, it beats out Woolworths Group Ltd (ASX: WOW). Woolies currently has a trailing and fully franked yield of 2.85% on offer today.

But that’s where Wesfarmers’ dividend superiority largely ends.

How does the Wesfarmers dividend measure up?

The aforementioned Coles currently has a yield of 3.44%, also fully franked. Of course, long-term Wesfarmers shareholders might also be holding their Coles shares from the 2018 demerger.

Perhaps naturally, the big four banks also pip Wesfarmers in the income department. Commonwealth Bank of Australia (ASX: CBA) presently has the lowest yield of the majors, but it is still at 3.4%. Westpac Banking Corp (ASX: WBC) is currently leading the sector with its 5.4% trailing yield.

And let’s not even get started on the miners. BHP Group Ltd (ASX: BHP) still has its trailing yield of 9.47%. And Rio Tinto Limited (ASX: RIO) also has a yield north of 9% on display right now.

Telstra Corporation Ltd (ASX: TLS) is also ahead of Wesfarmers with its 3.82% yield. 

So all in all, Wesfarmers doesn’t exactly measure up to many of its ASX 200 blue-chip peers when it comes to yield size. But then again, if Wesfarmers traded on the same 15.5 earnings multiple that Westpac does, its yield would be a lot higher. Instead, it is commanding a multiple of 28.25. Sometimes, you can’t have it all!

The post How does the Wesfarmers (ASX:WES) dividend compare to other ASX 200 blue chips? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen owns Telstra Corporation Limited. 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 and has recommended COLESGROUP DEF SET, Telstra Corporation Limited, and Wesfarmers Limited. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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