Good Evening, Stock splits are a hot-ticket item in 2024. Companies from NVIDIA NASDAQ: NVDA to Walmart NYSE: WMT and Chipotle Mexican Grill NYSE: CMG to Broadcom NASDAQ: AVGO are doing it, citing the same reasons. The meteoric rise in their share prices makes the stocks inaccessible for smaller retail investors like their employees. They want to reduce the cost of ownership for them and for the market, increasing accessibility and ownership in these desirable names. The takeaway for investors is that stock splits can create buy-the-dip opportunities in the underlying market, and companies that split their stock tend to see their stock prices outperform over time. A Bank of America study shows that split stocks tend to outpace the S&P 500 by more than 2:1, meaning investors wanting to beat the S&P need to include them in their portfolio. The caveat is that a stock split does nothing to alter the fundamental realities of the investment. A company with a market cap of $1 billion is worth the same $1 billion if it floats 100 shares or 100 million. The same goes for a stock’s price. A 100% gain is still worth 100%, whether the stock is $10 or $1000; the only difference is you have to own more shares of the lower-priced issue to equal the investment return. That means it isn't the stock price but the company quality that counts.
Here are three high-quality stock splits to put on your radar.
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William Bushee
MarketBeat | 
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