Of all the available large ASX shares we can buy, Wesfarmers Ltd (ASX: WES) looks like the best choice to me.
Let’s look at three great reasons to like the business.
Diversified business operations
The company is a diversified business that’s spread across a number of areas including hardware, general retailing, office and school products, healthcare, chemicals, energy (including lithium mining) and fertilisers.
None of the other ASX blue chip stocks are as diversified as that.
I think that’s really helpful with how there’s uncertainty about the future of the economy. Different industries may be able to perform for Wesfarmers at different times, so it could grow earnings in all economic conditions.
I love how Wesfarmers is willing to look across an array of industries for opportunities to help it grow earnings – it can search far and wide for acquisitions.
Two of its latest moves have been lithium mining and healthcare. I think both of those sectors have appealing long-term futures.
Strong return on equity (ROE)
The ROE may not be a financial statistic that many ‘retail’ customers follow, but it can be an important indicator of company quality and profitability.
It essentially tells us what profit return a business makes compared to the amount of money retained in the business.
Wesfarmers reported its ROE was above 30% in FY26 and it increased to 35.5%.
That says to me that the business can invest and earn a return of more than 30%, which can help charge profit higher. I think its investments in lithium mining and Anko are smart moves.
Reliable and growing dividend
Ever since Wesfarmers divested Coles Group Ltd (ASX: COL) from its business and the adjustment that created, Wesfarmers has regularly increased its profit and dividend for shareholders. There have been more than consecutive years of dividend growth for shareholders.
I believe that Wesfarmers’ dividend can continue to climb in the coming years as its various business operations expand and become profitable.
In the FY26 result, Wesfarmers decided to hike its annual dividend per share by 7.8% to $2.22. That equates to a dividend yield of 4.4%, if we include the franking credits.
When you add all of that together, I think Wesfarmers shares are an attractive investment.
