Face off: Wesfarmers vs Woolworths

Financial journalist and commentator on 3AW and Sky Business
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The Ws would be well-represented in many self-managed super funds (SMSFs) – the likes of Westpac, Westfield, Wesfarmers and Woolworths are stalwarts of the sector – all, coincidentally enough, for the recurring nature of their earnings streams and the strong dividend yields that flow from this.

Because they both own retail businesses, Wesfarmers (WES) and Woolworths (WOW) often get compared to each other, in what is often billed as ‘which one should you hold?’

Comparing operations

All that Woolworths does is retail – but it does that very well. The business is based of course on the eponymous supermarkets business, as well as BIG W discount department stores, consumer electronics through Powerhouse and Tandy (the company sold its 325-store Dick Smith chain last month), fuel through the Woolworths/Caltex alliance, liquor through BWS and Dan Murphy’s, and home improvements through Home Timber & Hardware, Thrifty-Link Hardware and Plants Plus Garden Centres. In 2011 Woolworths opened the Masters hardware stores venture with US hardware giant Lowe’s.

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