Wesfarmers and CSL: Key Stocks to Watch in 2024

2 min read | July 31, 2024 05:26 PM AEST | By Team Kalkine Media

Wesfarmers and CSL: Key Stocks to Watch in 2024 — Image source: Shutterstock

Wesfarmers (ASX:WES)

Founded in 1914 and headquartered in Perth, Wesfarmers is a diversified Australian conglomerate with operations spanning Australia and New Zealand. The company operates in several sectors, including retail, chemicals, fertilizers, industrial products, and safety products.

Wesfarmers is often likened to a publicly listed private equity firm due to its history of acquiring businesses, generating cash flow, reinvesting, and eventually selling for a profit. A notable example of this strategy is its acquisition of Coles Group in 2007, which was spun out in 2018. More than 50% of Wesfarmers’ operating profit comes from its Bunnings division, Australia's leading hardware and home improvement retailer. The company purchased the remaining 52% of Bunnings it did not own in 1994 for $594 million. Wesfarmers’ portfolio also includes Kmart, Target, Officeworks, Blackwoods, and Priceline Pharmacy.

Considered a leading blue-chip stock, Wesfarmers offers a diverse range of quality assets and a reliable dividend yield, making it a staple in many ASX share portfolios.

CSL (ASX:CSL)

CSL is a global biotechnology company known for developing and delivering innovative medicines. The company operates through three main units: CSL Behring, CSL Seqirus, and CSL Vifor.

CSL Behring, acquired in 2004, focuses on manufacturing and distributing blood plasma products. CSL Seqirus, formed from BioCSL and the acquisition of Novartis’ flu business in 2015, produces flu-related products and provides pandemic services. CSL Vifor specializes in treatments for iron deficiency and nephrology (kidney care).

CSL’s plasma collection unit is critical for creating life-saving treatments for serious illnesses worldwide. The company’s reliance on plasma and blood collections, combined with strategic acquisitions, positions CSL as a key player in the healthcare sector.

Share Price Valuation

For a quick assessment of Wesfarmers’ share price, reviewing the dividend yield provides useful insights. The current dividend yield for Wesfarmers is approximately 2.62%, compared to its five-year average of 3.84%. This indicates that WES shares are trading below their historical average dividend yield.

Wesfarmers and CSL offer strong performances and stability in their respective sectors. Their recent stock performances and solid fundamentals make them notable considerations for investors monitoring the ASX.

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