The Wesfarmers Ltd (ASX: WES) share price has jumped an impressive 15% in the past month, as the chart below shows. This has significantly outperformed the S&P/ASX 200 Index (ASX: XJO), which only increased by 2.4% in the last month.

Despite the big rise of Wesfarmers, the business could still deliver good long-term returns from here, in my view.

I think there are a few reasons why the business still looks attractive to me, despite its higher price/earnings (P/E) ratio.

Excellent businesses for the economic conditions

Wesfarmers is best known for owning a number of leading retailers including Bunnings, Kmart and Officeworks.

I view Bunnings and Kmart as two of the leaders of their respective areas of the retail world of hardware and general merchandising.

They have built a strong market share based on market-leading prices, offering great value. I think these businesses are well-positioned to continue serving Australian households during this period of higher inflation and elevated interest rates – just like they did a few years ago.

If there is an economic slowdown during FY27, Wesfarmers could benefit from a larger market share. The more scale Wesfarmers can achieve, the stronger its cost advantages will be for customers and the stronger its economic moat.

Its exposure to lithium mining could also be helpful following a large rise of the lithium price over the last year. Rising production from its lithium project should flow through to its earnings and cash flow.

Ongoing earnings diversification

Despite having a great earnings base already, the company is regularly looking for opportunities to expand the addressable markets of its businesses, which is helpful for a blue-chip to continue growing at a pleasing pace and not stagnate.

For example, Wesfarmers has opened five Anko stores in the Philippines and it plans to open five more Anko stores by the end of FY27.

Another example is that Bunnings has expanded its auto care and pet range, enabling to compete in two large retail categories.

A third example is how Kmart has opened a large K home store, which is a dedicated home and living products store with an expanded range. It could be a challenger to the IKEA model.

In the coming years, I expect the business to continue to add to its product ranges and even add entirely new businesses, which should be supportive over the long-term for the Wesfarmers share price.

Great margins

The margins of Kmart and Bunnings are extremely impressive and suggest to me how much money the business could generate on reinvested profit in the coming years.

In the FY26 half-year result, Wesfarmers reported that Bunnings Group generated a return on capital (ROC) of 70.8% and Kmart Group made a ROC of 69.8%. Considering the store networks of these businesses are growing, the future still looks very promising for Wesfarmers.

Its return on equity (ROE) is very good, in my opinion. In the HY26 result, the ROE excluding significant items was 32.7%, up from 31.2% in HY25. This means it’s making great use of retained shareholder funds and it’s becoming increasingly profitable.

Wesfarmers is a great business, though it’s not the only ASX share that I think is a buy right now.

The post 3 reasons why the Wesfarmers share price is a buy appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison 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.

National Australia Bank Ltd (ASX: NAB) shares have come under significant pressure recently.

On Monday, the NAB share price is trading at $37.68. That leaves the banking giant only modestly above its 52-week low of $35.48 and a long way from its 52-week high of $49.45.

In fact, NAB shares are now down approximately 24% from that high.

Does this pullback mean NAB shares are now good value?

Why has the NAB share price pulled back?

NAB is one of Australia’s largest banks and remains a major dividend payer.

But the banking sector is facing a more complicated backdrop than it was a year ago.

Higher interest rates can put pressure on borrowers, slow credit growth, and increase the risk of bad debts. At the same time, intense competition for deposits and home loans can make it harder for banks to grow margins.

Proposed changes to negative gearing could also create uncertainty for property investors and the broader housing market.

This is important because Australian banks are deeply tied to housing, business lending, consumer confidence, and the health of the economy.

When investors become concerned about these areas, bank valuations can come under pressure quickly.

What are brokers saying?

Broker opinion on NAB is mixed.

Citi recently placed a neutral rating on the bank’s shares with a $36.75 price target. Based on the current share price, that suggests the broker sees the stock as trading close to fair value.

Macquarie Group Ltd (ASX: MQG) is also neutral, though its $39.00 price target sits slightly above the current share price and implies potential upside of around 3.5%.

Morgan Stanley is more negative. It has an underweight rating and $34.50 price target on NAB shares, which implies potential downside of approximately 8%.

Morgans has a trim rating and $36.10 price target, which points to modest downside from current levels.

But it isn’t all doom and gloom. The team at UBS has a buy rating and $48.50 price target on NAB shares. If that proves accurate, the bank’s shares could rise by almost 29% from where they trade today.

And then there are dividends.

The consensus estimate is for fully franked dividends of 170 cents per share in both FY 2026 and FY 2027. This is flat on FY 2025.

Based on the current NAB share price of $37.68, that represents a forward dividend yield of approximately 4.5%.

Time will tell which broker makes the right call. But if UBS is on the money with its recommendation, big returns could be on the cards for investors over the next 12 months.

The post Is the NAB share price good value after crashing 24%? appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of Motley Fool Money. Motley Fool contributor James Mickleboro 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 Macquarie Group. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Depending on what sort of investor you are, targeting either capital growth or high dividends might be your priority.

For those who are targeting high dividends, it pays to keep an eye out for the stocks and funds that are paying out well, but which can still be bought cheaply on a yield basis.

I’ve selected three that might fit the bill. Let’s have a look.

Ophir High Conviction Fund (ASX: OPH)

The Ophir High Conviction Fund only pays out a dividend once a year. The good news is it’s not too late to buy in.

The ex-dividend date for the upcoming 35.17-cent-per-share dividend is June 30, so you’d have to move relatively quickly to be able to take advantage of it.

Given the Ophir share price is currently $2.86, the shares are paying a dividend yield of 12.3%.

It must be said that the shares are currently down 13.9% over a 12-month period, and are trading at a discount to the fund’s net asset value of $3.18.

Ophir’s top five holdings are in A2 Milk Company Ltd (ASX: A2M), MAAS Group Holdings Ltd (ASX: MGH), Mineral Resources Ltd (ASX: MIN), ResMed Inc (ASX: RMD), and SuperLoop Ltd (ASX: SLC).

Atlas Arteria Ltd (ASX: ALX)

Atlas Arteria has announced a 50% boost to its full-year dividend payout as it moves to fend off a takeover bid from Diamond Infraco.

The toll roads operator previously had a dividend target of 40 cents per share, but on Monday morning, it said in a statement to the ASX that this target would be increased to 60 cents per share.

At the company’s current share price of $5.10, that equates to a full-year dividend yield of 11.8%.

The company said on Monday:

The Independent Directors now intend to target paying distributions to ALX Securityholders of at least 60.0 cents per ALX Security in the 12 months following the end of the Offer Period made up of ordinary distributions of 40.0 cents per ALX Security and additional distributions of at least 20.0 cents per ALX Security. These distributions are expected to be funded by a combination of distributions from Atlas Arteria’s portfolio cash flows, proceeds from potential asset sales and, where appropriate, utilising corporate borrowing proceeds.

WAM Capital Ltd (ASX: WAM)

This fund has paid out a 7.75-cent dividend twice a year like clockwork in recent times, giving it a dividend yield of 10.1%.

Part of well-known investor Geoff Wilson’s stable, the fund’s portfolio has returned an annualised 14.5% return since 1999, compared with 8.5% for the S&P/ASX All Ordinaries Index (ASX: XAO).

The fund said in a recent statement that one of its top performers had been network-as-a-service provider Megaport Ltd (ASX: MP1), while telco Tuas Ltd (ASX: TUA) was a drag on the portfolio.

The post Targeting a dividend yield above 10%? Try these shares on for size appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has positions in Megaport and Ophir Asset Management Pty – Ophir High Conviction Fund. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Megaport and ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.