Boeing (NYSE:BA) has benefited from several favorable trends in the aerospace and defense industry. Orders for commercial aircraft have soared as airlines have become immensely profitable, while prospects for the military side of the business have also taken off because of planned budget increases from the federal government. These factors have taken Boeing stock above the $200-per-share level, and that has reawakened discussion about whether a long-awaited stock split might finally be right around the corner. Although it's been 20 years since Boeing last did a stock split, now would be a reasonable time for the aerospace giant to return to its historical practice.

Why investors think Boeing could do a stock split

Boeing has a history of stock splits that goes back 65 years. Between 1952 and 1977, Boeing split its stock five times, typically using a 2-for-1 ratio for the split. Starting in 1979, Boeing started to use 3-for-2 splits more frequently. The most recent split came in 1997, with a final 2-for-1 move for investors. Investors who owned 100 shares of Boeing stock before its 1952 split would own almost 36,500 shares of stock today merely because of stock splits.

As with many stocks, Boeing tended to do stock splits when it made sense from a trading liquidity perspective. Investing in the past usually involved round lots of 100 shares, making it useful for companies to keep their share prices from getting too expensive in order to give investors access to shares. Boeing would often do a 3-for-2 split when shares climbed toward the $70s, bringing share prices back toward $50. The most recent 1997 move came after Boeing traded into the triple digits, and again, the split pulled Boeing share prices downward toward a more tradeable level.

Boeing 787 Dreamliner.

Image source: Boeing.

Why Boeing might not do a stock split

Boeing has had ample opportunity to follow its past practices and do a stock split before now, yet it hasn't thus far. Ever since 2013, Boeing stock has traded above $100 per share. There is some historical precedent for going so long without a split, as the company saw the stock reach almost $200 per share before moving forward with a 2-for-1 move in the mid-1960s. If the company doesn't act soon, however, then that past practice will also prove no longer to be part of Boeing's split strategy.

Boeing management hasn't used quarterly conference calls to address the issue directly. Looking back more than 10 years, the company hasn't made any comments on stock splits, either positive or negative.

The key reason why Boeing might choose not to do a stock split is that there's far less incentive for companies generally to make such moves. Round lots of 100 shares are still preferred, but trading in what are known as odd lots of less than 100 shares is a lot more common with the rise of discount brokers and ordinary investors with less capital to invest. Boeing therefore feels little pressure to do a stock split for its shareholders, and without a compelling reason elsewhere, the aerospace giant might decide to follow the lead of companies that have far higher prices.

The stock split wildcard for Boeing

One thing Boeing investors will want to watch is whether the aerospace company gets any pushback from the overseers of the Dow Jones Industrial Average. Boeing is a member of the Dow Jones Industrials, and the price-weighted average gives extra influence to companies with high-priced stocks. Currently, Boeing represents almost 7% of the Dow, or roughly twice the weighting it would have if the Dow were weighted equally. As the third-highest priced stock in the Dow, Boeing isn't the first target for an index-related split, but it's worthy of consideration.

Absent a push from the Dow, Boeing seems unlikely to do a stock split in the near future. Even with shares now above $200, the aerospace giant seems content to let its stock rise along with its business prospects. As long as the share price keeps climbing, don't expect Boeing investors to complain too much about the lack of split.

Dan Caplinger owns shares of Boeing. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.