Wesfarmers vs Telstra shares: which dividend stock is better?

Looking to boost your passive income with ASX blue chips? Wesfarmers Ltd (ASX: WES) and Telstra Group Ltd (ASX: TLS) are two of the market’s giants. Each is a household name, popular with Australian investors for their steady dividends and defensive businesses. If you’re weighing up Wesfarmers vs Telstra shares for your dividend portfolio, here’s how the two compare in 2026.

The case for Wesfarmers

Wesfarmers is one of Australia’s oldest and largest companies. From its 1914 beginnings as a WA farmers’ cooperative, it’s grown into a diversified conglomerate spanning retail, office supplies, pharmaceuticals, and chemicals. Its subsidiaries include iconic names like Bunnings, Kmart, Officeworks, and Priceline. That means revenue is underpinned by everyday essentials, from hardware to health.

For fundamentals, Wesfarmers carries a hefty market cap of $82.64 billion, making it an ASX heavyweight. Its P/E ratio currently sits at 28.64, reflecting a market willing to pay a premium for its brand portfolio and reliability. The company’s dividend yield is 3.06%, fully franked, with a dividend per share of $2.22. Notably, Wesfarmers has a well-established record of regular, fully franked dividends extending back decades, including occasional special payouts. However, its shares are down -7.77% year to date as of mid-September 2026.

The case for Telstra

Telstra is Australia’s dominant telecommunications provider, with roots stretching back to the country’s telecommunications beginnings. Today, Telstra runs core infrastructure and consumer businesses including ServeCo, InfraCo Fixed, Amplitel and Telstra International, all part of a 2022 corporate restructure. The company not only serves millions of Aussies but also has a global presence in 20 countries.

Telstra clocks in with a market capitalisation of $53.91 billion—smaller than Wesfarmers but still a major player by any measure. Its P/E ratio is 24.27, which is noticeably cheaper than Wesfarmers on current earnings. For income investors, Telstra is offering a higher dividend yield: 4.35%, mostly franked (90%+ in recent years). Its dividend per share stands at $0.21 and, pleasingly, Telstra’s dividend growth has resumed after a long flat patch. Its shares are up a solid 3.49% year to date as of the latest data.

Valuation comparison

Here’s how the numbers stack up side by side:

Metric	Wesfarmers	Telstra
Market Cap	$82.64 billion	$53.91 billion
P/E Ratio	28.64	24.27
Dividend Yield	3.06% (100% franked)	4.35% (90% franked)
Dividend per Share	$2.22	$0.21
Year-to-date Return	-7.77%	+3.49%

Wesfarmers is bigger and arguably more diversified, but you’re paying a higher price for it, both in terms of P/E and a lower yield. Telstra, on the other hand, currently offers a much more generous dividend yield and is trading at a lower earnings multiple.

Recent share price performance

Share prices for both companies, as at mid-September 2026, tell an interesting story.

Wesfarmers shares have retreated from above $83 to $72.83 over the past three weeks. That translates to a loss of about 12% in less than a month. The broader 2026 year-to-date figure is also negative at -7.77%.

Telstra, by contrast, has been stable or slightly positive. In September, its price has hovered around the $4.70–$4.85 level, with occasional dips and rebounds. Telstra shares are up 3.49% for the year to date, showing relative resilience and steady investor support.

All prices and returns are as per the data provided, current to 15 September 2026.

Which is the better buy?

If I’m choosing for dividend income right now, my pick would be Telstra. The numbers are pretty clear: Telstra’s dividend yield of 4.35% is comfortably ahead of Wesfarmers’ 3.06%, and while franking isn’t quite 100%, it’s still generous for most Australian shareholders. Add to that its lower P/E ratio, indicating better value, and its positive share price momentum so far in 2026.

Wesfarmers is a quality blue-chip and has one of the best dividend records on the ASX, but you’re currently paying a premium for its diversification and brand power. The lower yield and negative short-term return make it less attractive for pure income seekers. For yield-focused investors looking for relatively defensive income in 2026, I think Telstra is the more appealing buy out of the two right now.

The post Wesfarmers vs Telstra: Which ASX dividend stock comes out on top? 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 positions in and has recommended Telstra Group. 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.

A $1.2 million superannuation balance is a substantial amount of money.

But what sort of retirement income could it fund?

The answer to that depends on how the money is invested and how quickly the retiree is comfortable drawing it down.

Start with the withdrawal rate

One simple way to think about retirement income is as a percentage of the starting balance.

If someone withdrew 4% from a $1.2 million portfolio in the first year, that would provide around $48,000.

A 5% withdrawal would increase the annual income to $60,000, while 6% would provide $72,000.

That gives us a fairly wide range.

I would not automatically choose the highest figure simply because the portfolio could support it in the first year. Retirement could last for decades, and the balance still needs to cope with market downturns, inflation, and future spending.

For me, the amount withdrawn would need to make sense alongside the investments held and the lifestyle I wanted.

Income does not have to come entirely from dividends

It is important to note that a $1.2 million portfolio doesn’t necessarily have to generate a 5% dividend yield to provide $60,000 of annual income.

Retirement income can come from several places.

A portfolio might receive dividends and distributions from shares and exchange-traded funds (ETFs), interest from defensive assets, and cash from selling a small portion of investments when required.

That gives an investor more freedom when building the portfolio.

I would rather hold a mixture of investments with good long-term prospects than force the entire $1.2 million into high-yield assets purely to produce a particular income figure.

Growth still has a role

Even after retirement, I would want part of the portfolio invested for growth.

If someone retires in their 60s, their superannuation may still need to support them for another 30 years.

Over that period, living costs are likely to rise.

An income of $60,000 may feel comfortable today, but it will not have the same purchasing power decades from now.

Holding Australian and international shares gives the portfolio a chance to keep growing while withdrawals are being made.

Of course, share markets will not rise every year. That is why I would also want some cash or more defensive investments available for spending during weaker periods.

How much would I aim for?

If I had $1.2 million in superannuation, I would probably think about an initial income somewhere around $48,000 to $60,000 a year rather than immediately targeting $72,000.

That is not because $72,000 is impossible.

It simply places more pressure on the portfolio from the beginning, particularly if withdrawals later need to rise with inflation.

Someone with lower expenses may be happy to take much less, while another retiree may deliberately draw down their capital more quickly because they want to spend more in the early years of retirement.

There is no single number that will suit everyone.

Foolish takeaway

A $1.2 million superannuation balance could potentially provide a meaningful retirement income without requiring an unusually high investment return.

At withdrawal rates of 4% to 5%, it could provide roughly $48,000 to $60,000 in the first year.

For me, the bigger goal would be finding a level of income that supports the lifestyle I wanted while still giving the remaining balance a chance to keep working for the years ahead.

The post How much income could a $1.2 million superannuation balance generate? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

BHP Group Ltd (ASX: BHP) is already one of the largest companies on the Australian share market.

That size can sometimes make it easy to assume the biggest growth period is already behind it.

I am not so sure that is the case.

And if I were looking for an ASX mining share to buy today and leave alone for the next decade, BHP would be high on my list.

Scale gives BHP options

One of the things I like most about BHP is the flexibility that comes with its scale.

The company owns large, long-life assets across several major commodities, which means management can direct capital towards the opportunities offering the strongest prospective returns.

That becomes particularly valuable in resources.

Mining projects can take years to develop, cost billions of dollars, and operate for decades once they are running. Companies with strong balance sheets and existing infrastructure have a major advantage when attractive opportunities appear.

BHP does not need every commodity to be booming at the same time.

It can continue investing through weaker periods, expand existing operations where the economics make sense, and take a patient approach to major new projects.

Over a 10-year holding period, I think that flexibility could be more valuable than trying to predict which commodity will perform best next year.

Demand should keep evolving

The global economy will probably look quite different a decade from now, but it will still need enormous quantities of physical materials.

Cities will keep expanding. Electricity networks need upgrading. Data centres, renewable energy projects, electric vehicles, construction, and manufacturing all require resources somewhere along the supply chain.

BHP’s exposure to commodities, including copper and iron ore, puts it in a strong position to participate in that spending.

I am particularly interested in how its copper portfolio could develop.

BHP already operates major copper assets, giving it a platform to expand as demand increases. New supply is also difficult to bring online quickly, which could make high-quality existing operations increasingly valuable over time.

The important point for me is that BHP already owns the assets and expertise needed to participate rather than having to build an entirely new business from scratch.

I would expect income along the way

A decade is a long time to wait for an investment thesis to play out, so I also like that BHP can return substantial amounts of cash to shareholders.

Its dividend will move with commodity prices and profits, so I would never treat the payment as fixed.

But when conditions are strong, BHP’s enormous operations can generate significant free cash flow.

That gives management the ability to balance reinvestment in future projects with dividends to shareholders.

For a long-term investor, I think receiving income while the company’s asset base continues to develop is a valuable combination.

The risks are part of the investment

BHP will not deliver smooth results every year.

Commodity prices can fall sharply, major projects can run over budget, and changes in global economic activity can quickly affect demand.

There are also political, regulatory, and operational risks across the countries where BHP operates.

Those uncertainties are why I would think about the investment in decades rather than quarters.

I am backing the quality of the assets, the company’s financial strength, and management’s ability to allocate capital through multiple commodity cycles.

Foolish takeaway

BHP is the type of share I think makes more sense when viewed over years rather than months.

There will be weaker periods for commodity prices along the way, but the company has the assets, financial strength, and investment opportunities to keep moving forward through those cycles.

For me, that is enough to make BHP a share I would be comfortable buying and holding for the next decade.

The post Why I’d buy and hold BHP shares for 10 years appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.