Is the Wesfarmers share price expensive at $35.38?

Wesfarmers (ASX:WES) is a large cap stock engaged in various business operations, such as supermarkets, liquor, hotels and convenience stores; home improvement; office supplies, and an industrials division with businesses in chemicals, energy and fertilizers, industrial and safety products and coal.

Right now the Wesfarmers share price is on the expensive side from a factor perspective, based on its Value Rank of 47. Let's see why this is.

A closer look at Wesfarmers' Value Rank

We can see by using Wesfarmers’ StockReport that the group has a:

• Rolling price to book value of 4.28,
• Trailing twelve month price to earnings ratio of 21.3
• Trailing twelve month price to free cashflow of 20.7
• Rolling dividend yield of 4.27%
• Trailing twelve-month price to sales ratio of 1.45

This combination of financial traits suggests that Wesfarmers stock is toward the more expensive end of the market. Being expensive is not the end of the world, of course - but it does help to have favourable exposures to other factors to justify the share price premium.

What does this mean for potential investors?

Some of the best quality stocks in the market have defensible models that can deliver high levels of shareholder returns over the long term. But there are no guarantees and it's important to do your own research. Indeed, we've identified some areas of concern with Wesfarmers that you can find out about here.