If you're looking for steady, income from shares, Metcash Ltd and Wesfarmers Ltd will both be on your radar. Let's take a closer look at how Metcash vs Wesfarmers shares stack up.
Metcash is Australia's leading distributor for independent food retailers, as well as a supplier for bottle shops and hardware stores. According to its most recent public description, Metcash supports more than 1600 independent supermarkets and has a footprint in liquor and hardware too.
The current yield is an attractive 6.34%, with dividends franked at 100%.
Metcash has a long track record of paying fully-franked dividends, with recent annual payouts split between interim and final dividends – all 100% franked.
For income investors, Wesfarmers offers a current dividend yield of 3.07%, lower than Metcash, but with a much higher absolute dividend per share, reflecting its larger share price.
Wesfarmers carries a higher market cap than Metcash, offering scale, diversification and resilience. Its P/E ratio is 28.53, much higher than Metcash, suggesting the market is pricing in more growth and possibly less underlying value for income-seekers right now.
Looking at recent share price data, both Metcash and Wesfarmers have seen negative returns year-to-date.
Over the last few weeks, its share price drifted from $2.98 down to $2.84, a modest decline, including several small daily ups and downs.
Over the same period, the Wesfarmers share price dropped from $82.69 to $72.86.
Its 6.34% fully-franked dividend yield is far higher than Wesfarmers' 3.07%, and its lower P/E ratio could signal better value.