Wesfarmers vs Woolworths: Which ASX dividend share looks better this month?

Wesfarmers vs Woolworths shares: Which dividend stock is better today?

When it comes to blue-chip dividend shares on the ASX, Wesfarmers Ltd (ASX: WES) and Woolworths Group Ltd (ASX: WOW) are two names I hear mentioned time and again. Both are household names, both deliver franked dividends, and both have substantial histories as Australian retail powerhouses. If you’re trying to decide between the two, you’re not alone—so let’s take a closer look at where their shares stand today.

The case for Wesfarmers

Wesfarmers is one of Australia’s largest diversified conglomerates. With origins back in 1914 as a Western Australian farmers’ cooperative, today it’s home to familiar brands like Bunnings, Kmart, Officeworks, Priceline, and a growing health and wellbeing business after buying Australian Pharmaceutical Industries. This breadth means Wesfarmers is exposed to multiple sectors—from consumer retail to chemicals, energy and fertilisers—making it less reliant on any one division.

A few points leap out in the fundamentals:

• Market Cap: $86.93 billion, making it one of the country’s biggest listed companies
• Dividend Yield: 2.99%, fully franked at 100%
• P/E Ratio: 29.34

Wesfarmers’ dividend has been not only consistent but also fully franked, and the last payout (final and interim for FY26) totals $2.22 per share. According to its most recent public description, Wesfarmers is continuing to invest and broaden its portfolio.

The case for Woolworths

Woolworths Group is the dominant supermarket retailer across Australia and New Zealand. If you’ve set foot in a Woolies or Big W store lately, you’ve experienced just a slice of its immense retail presence. With its core focus on groceries and everyday needs, Woolworths is often seen as a “defensive” stock, aiming for stability even during tougher economic times. It divested its drinks and hospitality business in 2021, sharpening its focus on supermarkets and general merchandise.

Key fundamentals include:

• Market Cap: $47.89 billion
• Dividend Yield: 2.49%, also fully franked at 100%
• P/E Ratio: 42.04

Woolworths’ most recent declared dividends (final and interim for FY26) total $0.97 per share. In its company profile, Woolworths highlights its large store network and massive workforce supporting steady cashflows from groceries and essentials.

Valuation comparison

Let’s put some of the main valuation and return metrics side by side:

It’s notable that Wesfarmers trades on a much lower P/E ratio than Woolworths—29.34 compared to 42.04—even though both are in sectors that typically attract market premiums. Wesfarmers’ full-year dividend is also higher in absolute terms and yield, with both companies offering the stability of full franking.

Note: While both companies’ P/E and EPS are presented side by side, keep in mind sector differences—Wesfarmers’ more diversified earnings base vs Woolworths’ retail focus—may affect how much weight I’d give to a headline multiple.

Recent share price performance

Comparing recent share price activity up to 30 September 2026:

• Wesfarmers closed at $76.61, up 3.0% on the day, but has returned -5.6% YTD
• Woolworths finished at $39.20, up 0.8% on the day, with a very strong YTD return of 35.7%

That’s a huge divergence over 2026 so far—Woolworths has enjoyed a stellar run, while Wesfarmers has pulled back.

Which is the better buy?

Balancing strong dividend credentials with business quality and recent momentum, my pick today would be Wesfarmers. Here’s why: The absolute dividend yield is higher, the payout is fully franked, and Wesfarmers’ diversified portfolio is built to weather different macro conditions—not just those that support grocers. While Woolworths has shot the lights out with a 35.7% return this year, its P/E ratio is substantially higher, suggesting markets may already be pricing in a lot of optimism. I see more sustainable value and income potential in Wesfarmers at these levels, especially for those who care about fully franked dividends and a lower entry multiple. For income investors, Wesfarmers ticks more boxes for me. Woolworths is certainly quality, but at 42 times earnings, I’d rather wait for a better entry point there.

The post Wesfarmers vs Woolworths: Which ASX dividend share looks better this month? appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.