For the 10 years through fiscal 2013 AE Portfolio Conservative Holding Wesfarmers Ltd (ASX: WES, OTC: WFAFF, ADR: WFAFY) has delivered a compound annual growth rate for net profit after tax (NPAT) of 11.2 percent, and that’s been matched with consistent dividend growth.

And the retail giant is well positioned to benefit as consumers emerge from a spending torpor that gripped Australia during mid-2013.

Having already demonstrated the ability to execute on turnaround as well as expansion strategies and to efficiently and effectively deploy capital, share-price upside for Wesfarmers at this point is likely a matter of macroeconomics.

Wesfarmers CEO Richard Goyder said in a Sept. 20 press availability that Wesfarmers has experienced a marked bounce in sales since the federal election, adding to signs the change of government in Canberra has buoyed the household sector.

Mr. Goyder noted an “election campaign effect” in Wesfarmers’ recent numbers: weaker sales late in the campaign followed by a recovery after the vote.

A sustained upturn in consumer confidence would bolster grocery retailers such as its Coles unit, while a rebound in the housing market would lift its Bunnings unit, Australia’s largest household hardware chain.

A Westpac Banking Corp/Melbourne Institute index of consumer sentiment fell 2.1 percent to 108.3 in October from 110.6 in September.

But confidence remains relatively high–above the 100-point level that means optimists outnumber pessimists for a fifth consecutive month and eleventh of the past 12–following a series of interest rate cuts by the Reserve Bank of Australia designed to stimulate export- and consumer-focused parts of the economy.

The RBA cut its benchmark overnight cash rate to a record-low 2.5 percent in August, its eighth cut since late 2011.

In September the index jumped 4.6 percent to its highest level since December 2010, surging in the wake of a change of government.

The lion’s share of developments over the past month–including lower interest rates, firmer economic data, an end to domestic political uncertainty–support consumers’ good feelings, though there was likely to be some unwinding of the mild euphoria aroused by Australia’s election of a new government on Sept. 7.

Prime Minister Tony Abbott’s Liberal-National coalition is widely seen as more capable of managing a slowing economy.

Australian stocks were in retreat during the survey period, and the Australian dollar was ticking higher. These factors could have weighed on sentiment. Economists attributed some of the slight erosion to the US government shutdown that started on Oct. 1.

The Westpac survey was conducted between Sept. 30 and Oct. 4.

And although Aussies are feeling more comfortable, that positive frame of mind will be enhanced once US politicians finally come up with an agreement on their budget and a decision to lift the debt ceiling.

Australian residential building approvals were down a seasonally adjusted 4.7 percent in August after rising a seasonally adjusted 10.8 percent in July. This news was a disappointment for observers expecting a decline of just 2 percent.

But in trend terms a total of 13,896 dwelling units were approved in August, resulting in a 0.1 percent month-over-month and 5.8 percent year-over-year rise, driven predominantly by a 0.6 percent month-over-month rise in house approvals.

Residential building approvals have risen for 19 consecutive months. And house prices have climbed 6.4 percent in 2013, led by a 9.4 percent surge in Sydney, suggesting a shortage of supply that should lead to more newbuilds.

Wesfarmers declared a final dividend in respect of fiscal 2013 of AUD1.03 per share, up 8.4 percent from the AUD0.95 paid a year ago, and also declared a AUD0.50 per share return of capital payment.

Total dividends for fiscal 2013 come to AUD1.80, up 9.1 percent from AUD1.65 for fiscal 2012.

Management also announced a capital return of AUD0.50 per share, a total of AUD579 million that demonstrates Wesfarmers’ conservative approach to capital management. Rather than horde it or spend it on an imprudent acquisition the company is returning excess funds to shareholders.

Management reported NPAT of AUD2.26 billion for fiscal 2013, up 6.3 percent on solid earnings growth for the company’s retail businesses, a significant increase in earnings in the insurance division and continued reduction in financing costs and despite a significant decline in earnings from the Resources division as a result of lower coal prices and disappointing results from Target.

Operating cash flow was up 8 percent to AUD3.93 billion, while free cash flow surged by 47.5 percent to AUD2.17 billion.

Net capital expenditure of AUD1.672 billion was 28.9 percent below the fiscal 2012, as ongoing organic investments, including in its retail store networks in the ammonium nitrate capacity expansion in the chemicals business, was supported by increased property disposals of AUD659 million for the year.

Revenue from the Coles supermarket business increased by 4.9 percent to AUD36 billion in fiscal 2013, Earnings before interest and taxation (EBIT) for the key unit increased more than twice as fast as revenue, rising 13 percent to AUD1.5 billion. That’s double the EBIT posted for fiscal 2008.

Management reported strong growth for food and liquor, as sales surged to AUD28 billion. EBIT increased to AUD1.4 billion, a margin increase of 30 basis points from fiscal 2012.

Comparable store sales grew 4.3 percent, a 60 basis point improvement on the prior year. The Coles Express convenience store unit posted revenue growth of 3.8 percent.

Coles is posting numbers that demonstrate the continuing positive impact of a turnaround program implemented five years ago. Profit growth has consistently exceeded sales growth, demonstrating the significant progress made in improving efficiency throughout the business, reducing the cost base as well as investing in value.

Management noted that customer transaction growth throughout the year, during the fourth quarter in particular, “has never been stronger.”

Profit growth has consistently exceeded sales growth, demonstrating the significant progress made in improving efficiency throughout the business, reducing the cost base as well as investing in value. And management expects the trend to continue.

Bunnings revenue, meanwhile, grew by 7 percent, with earnings up 7.5 percent. Management expects higher volumes for both consumer and commercial sales, driven by growth strategies as well as improving economic conditions.

Twenty-three new Bunnings locations were opened during fiscal 2013, bringing to 88 the total opened over the past four years. Network development activity also includes upgrading and reinvigorating existing stores and ensuring all stores benefit from new and expanded merchandising concepts.

Bunnings has stepped up its CAPEX program in the aftermath of the Great Financial Crisis, spending AUD2.1 billion over the past four years. Having built a strong new store pipeline, management is now focused on converting land into trading stores at a higher rate than historically achieved.

Bunnings will open at least 20 new warehouse stores during fiscal 2014, representing a 10 percent increase in net floor space. Management expects to repeat the 10 percent floor-space increase in fiscal 2015.

The longer-term property pipeline now sits at around 85 warehouse sites. As of mid-August 2013 Wesfarmers had 20 Bunnings stores under construction and had already opened three during the young fiscal 2014.

Wesfarmers, which is yielding 4.4 percent, is a buy under USD40 on the Australian Securities Exchange (ASX) using the symbol WES and on the US over-the-counter (OTC) market using the symbol WFAFF.

Wesfarmers also trades on the US OTC market as an American Depositary Receipt (ADR) under the symbol. Wesfarmers’ ADR is worth 0.5 of an ordinary, ASX-listed share and is a buy under USD20.

Wesfarmers stock closed at AUD41.07 on the ASX on Oct. 9. Based on the prevailing exchange rate as of this writing, that’s USD38.78 in US dollar terms. The WFAFF OTC listing closed at USD38.79, while the ADR traded under WFAFY, which is worth 0.5 ordinary, ASX-listed shares, closed at USD19.33.

Wesfarmers’ fiscal year runs from Jul. 1 to Jun. 30. The company reports full financial and operating results twice a year; it typically posts first-half results in mid-February, with full fiscal year numbers out in mid-August.

Interim dividends are usually declared in February, along with financial and operating results for the first half of the fiscal year, with payment typically made a month later, in March. Final dividends are usually declared in August, along with fiscal year results, with payment made in September.

Wesfarmers’ final dividend in respect of fiscal 2013 of AUD1.03, declared on Aug. 15, 2013, was paid on Sept. 27, 2013, to shareholders of record on Aug. 26. Shares traded ex-dividend on this declaration as of Aug. 20.

The most recent interim dividend of AUD0.77 per share was declared Feb. 14, 2013. It was paid March 28, 2013, to shareholders of record as of Feb. 25. Shares traded ex-dividend on this declaration as of Feb. 19. The fiscal 2013 interim dividend was up 10 percent from the interim dividend paid for fiscal 2012.

Management will declare the interim dividend for fiscal 2014 on or about Feb. 13, 2014, when it reports financial and operating results for the first six months of the financial year.

Dividends paid by Wesfarmers are “qualified” for US tax purposes. Based on the “fiscal cliff” compromise reached in Washington, DC, in early January 2013 dividends will be taxed at Bush-era rates of 5 percent to 15 percent for investors’ first USD450,000 a year of income for couples and USD400,000 for single filers. Above that the maximum tax rate is 20 percent.

The Australian government withholds 5 percent to 15 percent, based on the US-Australia tax treaty on double taxation. The two countries have not taken the step of eliminating withholding from dividends paid in respect of shares held in a US IRA, as have the US and Canada.

Among the analysts who cover the stock five rate it a “buy” according to Bloomberg’s standardization of brokerage house recommendation terminology, while six rate it a “hold.” Five brokerages that cover Wesfarmers rate the stock a “sell.”

The average 12-month target price between the 13 analysts that provide a figure is AUD43.07, with a high of AUD49.41 and a low of AUD37.18.  Based on an Oct. 9, 2013, closing price of AUD41.07 on the ASX, the implied one-year total return, including the present annualized dividend rate of AUD1.80, is 9.3 percent.