WES and FLT shares: 2 ASX shares to watch

The Wesfarmers Ltd (ASX:WES) share price has decreased 4.0% since the start of 2025. It's probably worth asking, 'is the WES share price good value?'
The Wesfarmers Ltd (ASX:WES) share price has decreased 4.0% since the start of 2025. Meanwhile, the Flight Centre Travel Group Ltd (ASX:FLT) share price is 45.4% away from its 52-week high.

WES share price in focus

Founded in 1914, Wesfarmers is a diversified Australian conglomerate headquartered in Perth. Its operations span retail, chemical, fertiliser, industrial and safety brands and products across Australia and New Zealand.

Wesfarmers is often compared to a publicly listed private equity firm. It has a long history of buying businesses, leveraging their cash flow, re-investing in growth and eventually selling them for a premium. A notable example of this is Coles Group, which it bought in 2007 and spun out in 2018. However, by far (over 50%) of the company’s operating profit comes from Bunnings, the #1 hardware and home improvement business in Australia. Wesfarmers began buying parcels in Bunnings in 1987, eventually acquiring the final 52% in 1994 for $594 million.

Wesfarmers has long been considered a leading blue chip stock on the ASX and is known for paying a consistent dividend. Other well-known brands under the Wesfarmers umbrella include Blackwoods, Kmart, Target, Officeworks, and Priceline Pharmacy.

FLT shares

Flight Centre is an Australian staple in the travel industry, but you may not know that it operates under multiple names across over 80 countries!

Flight Centre isn’t just limited to booking flights either. They offer services in both the retail and corporate sectors and across sub-sectors including tour operations, travel experiences and hotel management.

Unlike many of the online travel agencies, Flight Centre still has brick-and-mortar locations where customers can come in and have face-to-face consultations. This extra service, as well as the exclusive deals Flight Centre can get access to because of its reach, are what keep customers coming back.

WES & FLT share price valuation

We would consider WES to be a ‘mature’ or ‘blue-chip’ business, so some of the metrics that could be worth considering include the debt/equity ratio, average yield, and return on equity, or ROE. These measures give us a sense of the company’s debt levels, their ability to generate returns from their assets, and their ability to consistently return profits to shareholders.

For FY24, Wesfarmers Ltd reported a debt/equity ratio of 131.4%, meaning the company is leveraged (it has more debt than equity). This can increase risk so it’s important that a leveraged company is generating stable returns and has sufficient cash flow to pay interest on its debts.

Over the last 5 years, WES has delivered an average dividend yield of 3.4% per year. This is important to note if you’re looking for income from your investments.

Finally, in FY24, WES reported an ROE of 30.3%. For a mature business you generally want to see an ROE of more than 10%, so WES clears this hurdle.

As more of a growth company, some of the trends we might consider for FLT shares include revenue growth, profit growth, and return on equity (ROE). I say ‘trends’ because it’s always important to look at these figures over a few years. The trend is a much more valuable figure than a single measure at one point in time.

Over the last 3 years, FLT has increased revenue at a rate of 89.8% per year to hit $2,708m in FY24. Meanwhile, net profit has fallen from $433m to $140m. As for ROE, FLT’s last reported figure was 11.9%.

Please keep in mind that context is important. These metrics give us some indication of company performance, but it’s just the start of valuing WES or FLT shares. To learn more about valuation, check out one of our free online investing courses.

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