ASX:WES

Stock Analysis Report

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Executive Summary

Wesfarmers Limited primarily engages in the retail business in Australia, New Zealand, the United Kingdom, and internationally. More Details


Snowflake Analysis

Adequate balance sheet second-rate dividend payer.


Similar Companies

Share Price & News

How has Wesfarmers's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: WES has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.0%

WES

-2.3%

AU Multiline Retail

-3.9%

AU Market


1 Year Return

15.0%

WES

13.6%

AU Multiline Retail

-9.6%

AU Market

Return vs Industry: WES exceeded the Australian Multiline Retail industry which returned 13.6% over the past year.

Return vs Market: WES exceeded the Australian Market which returned -9.6% over the past year.


Shareholder returns

WESIndustryMarket
7 Day-2.0%-2.3%-3.9%
30 Day3.1%3.0%1.8%
90 Day-1.3%0.6%1.7%
1 Year19.2%15.0%17.9%13.6%-6.4%-9.6%
3 Year77.5%8.3%71.6%8.4%12.3%-1.9%
5 Year112.1%17.5%98.1%14.2%40.0%11.3%

Price Volatility Vs. Market

How volatile is Wesfarmers's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Wesfarmers undervalued compared to its fair value and its price relative to the market?

32.05x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: WES (A$45.96) is trading above our estimate of fair value (A$40.41)

Significantly Below Fair Value: WES is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: WES is poor value based on its PE Ratio (32x) compared to the XX Multiline Retail industry average (23.7x).

PE vs Market: WES is poor value based on its PE Ratio (32x) compared to the Australian market (20.5x).


Price to Earnings Growth Ratio

PEG Ratio: WES is poor value based on its PEG Ratio (3.4x)


Price to Book Ratio

PB vs Industry: WES is overvalued based on its PB Ratio (5.6x) compared to the XO Multiline Retail industry average (1.7x).


Next Steps

Future Growth

How is Wesfarmers forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

9.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WES's forecast earnings growth (9.3% per year) is above the savings rate (2.3%).

Earnings vs Market: WES's earnings (9.3% per year) are forecast to grow slower than the Australian market (17.6% per year).

High Growth Earnings: WES's earnings are forecast to grow, but not significantly.

Revenue vs Market: WES's revenue (3.2% per year) is forecast to grow slower than the Australian market (4.8% per year).

High Growth Revenue: WES's revenue (3.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: WES's Return on Equity is forecast to be high in 3 years time (22.5%)


Next Steps

Past Performance

How has Wesfarmers performed over the past 5 years?

1.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WES has high quality earnings.

Growing Profit Margin: WES's current net profit margins (5.3%) are lower than last year (6.9%).


Past Earnings Growth Analysis

Earnings Trend: WES's earnings have grown by 1% per year over the past 5 years.

Accelerating Growth: WES's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: WES had negative earnings growth (-16.4%) over the past year, making it difficult to compare to the Multiline Retail industry average (-32.7%).


Return on Equity

High ROE: WES's Return on Equity (17.4%) is considered low.


Next Steps

Financial Health

How is Wesfarmers's financial position?


Financial Position Analysis

Short Term Liabilities: WES's short term assets (A$8.1B) exceed its short term liabilities (A$7.3B).

Long Term Liabilities: WES's short term assets (A$8.1B) do not cover its long term liabilities (A$8.8B).


Debt to Equity History and Analysis

Debt Level: WES's debt to equity ratio (28.4%) is considered satisfactory.

Reducing Debt: WES's debt to equity ratio has increased from 26.3% to 28.4% over the past 5 years.

Debt Coverage: WES's debt is well covered by operating cash flow (171.2%).

Interest Coverage: WES's interest payments on its debt are well covered by EBIT (7.9x coverage).


Balance Sheet


Next Steps

Dividend

What is Wesfarmers's current dividend yield, its reliability and sustainability?

3.31%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: WES's dividend (3.31%) is higher than the bottom 25% of dividend payers in the Australian market (2.23%).

High Dividend: WES's dividend (3.31%) is low compared to the top 25% of dividend payers in the Australian market (5.53%).


Stability and Growth of Payments

Stable Dividend: WES's dividend payments have been volatile in the past 10 years.

Growing Dividend: WES's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (106%), WES's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: WES's dividends in 3 years are forecast to be covered by earnings (86.4% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.8yrs

Average management tenure


CEO

Rob Scott (50 yo)

2.83yrs

Tenure

AU$7,762,781

Compensation

Mr. Robert G. Scott, also known as Rob, has been Managing Director, Chief Executive Officer and Executive Director of Wesfarmers Limited since November 16, 2017. Mr. Scott served as Deputy Chief Executive ...


CEO Compensation Analysis

Compensation vs Market: Rob's total compensation ($USD5.46M) is above average for companies of similar size in the Australian market ($USD3.60M).

Compensation vs Earnings: Rob's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Robert Scott
Group MD2.83yrsAU$7.76m0.058%
A$ 30.0m
Anthony Gianotti
Chief Financial Officer2.83yrsAU$4.31m0%
A$ 0
Ian Bailey
Head of the Australian Conglomerate's Department Stores Division & Managing Director of Kmart1.83yrsAU$3.20m0%
A$ 0
Michael Schneider
MD of Bunnings Group and MD of Bunnings Australia & New Zealand3.42yrsAU$3.77m0%
A$ 0
Simon Edmonds
Manager of Investor Relationsno datano datano data
Maya vanden Driesen
Group General Counsel5.75yrsno datano data
Cathy Bolt
Media & External Affairs Managerno datano datano data
Jennifer Bryant
Chief Human Resources Officer4yrsno datano data
Ian Hansen
Chief Executive Officer of Wesfarmers Chemicals13yrsno datano data
Tim Bult
Managing Director of Industrial & Safety0.42yrno datano data
Marina Joanou
Managing Director of Targetno datano datano data
Aleksandra Spaseska
Chief Financial Officer of Kmart Group0.58yrno datano data

2.8yrs

Average Tenure

50yo

Average Age

Experienced Management: WES's management team is considered experienced (2.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Robert Scott
Group MD2.83yrsAU$7.76m0.058%
A$ 30.0m
Michael Chaney
Non Executive Chairman4.83yrsAU$798.46k0.0077%
A$ 4.0m
Wayne Osborn
Independent Non-Executive Director10.58yrsAU$282.91k0.0013%
A$ 677.4k
Sharon Warburton
Independent Non-Executive Director1.17yrsAU$290.70k0.00062%
A$ 323.1k
Diane Smith-Gander
Independent Non-Executive Director11.17yrsAU$294.91k0.0011%
A$ 552.4k
Vanessa Wallace
Independent Non-Executive Director10.25yrsAU$282.91k0.0012%
A$ 641.0k
S. English
Non-Executive Director2.42yrsAU$294.91k0.00021%
A$ 109.4k
Jennifer Westacott
Independent Non-Executive Director7.42yrsAU$294.91k0.00060%
A$ 312.7k
Michael Roche
Independent Non-Executive Director1.58yrsAU$310.91k0.00026%
A$ 135.5k

4.8yrs

Average Tenure

60yo

Average Age

Experienced Board: WES's board of directors are considered experienced (4.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: WES insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Wesfarmers Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Wesfarmers Limited
  • Ticker: WES
  • Exchange: ASX
  • Founded: 1914
  • Industry: General Merchandise Stores
  • Sector: Retail
  • Market Cap: AU$52.111b
  • Shares outstanding: 1.13b
  • Website: https://www.wesfarmers.com.au

Number of Employees


Location

  • Wesfarmers Limited
  • Brookfield Place Tower 2
  • Level 14
  • Perth
  • Western Australia
  • 6000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WFAF.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
WESASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 1992
WF3DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
WESCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 1992
WFAF.YOTCPK (Pink Sheets LLC)ADR NEW 2014USUSDOct 2008

Biography

Wesfarmers Limited primarily engages in the retail business in Australia, New Zealand, the United Kingdom, and internationally. It is involved in the retail sale of building materials, and home and garden ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/31 10:42
End of Day Share Price2020/10/30 00:00
Earnings2020/06/30
Annual Earnings2020/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.