Stock splits might not have any fundamental impact on a company, but many investors still look for companies that are splitting their shares as a sign of success. All a stock split technically does is create more shares at a lower price per share. Yet because stock splits often come after periods of strong stock performance, many shareholders see them as a reason to be confident that the company believes its fundamental business will remain strong.

Stock splits haven't been nearly as frequent recently as they've been in the past, as many companies prefer just to let their share prices climb as high as possible without worrying about what impact a high price will have on an investor's ability to buy shares. Yet some companies are still traditionalists. The following three stocks are among the biggest that have done stock splits so far in 2018 and their prospects still largely look good.

Stock

Split Date

Ratio

Aflac (NYSE:AFL)

March 16

2-for-1

Trex (NYSE:TREX)

June 18

2-for-1

Herbalife Nutrition (NYSE:HLF)

May 15

2-for-1

Data source: Yahoo! Finance. Split date is payable date for the split.

Quacking about a split

Supplemental-insurance giant Aflac is best known for the white duck it has as its spokesperson, but the insurance products it provides to workers in the U.S. and Japan help millions get the coverage they need in areas that few insurance companies cover. That's been a successful model, and the insurer has seen its share price rise substantially over the years.

In February, Aflac announced that it would do a 2-for-1 split effective March 16, putting it in the form of a 100% stock dividend. CEO Daniel Amos celebrated the announcement, noting that "this is the ninth split of the company's common stock since listing on the NYSE in 1974 and the first in 17 years." Aflac pointed to improving liquidity as a key reason for the move.

Looking ahead, Aflac has a lot to be pleased about. Tax reform already has had a positive impact on the company, and restructuring efforts have allowed Aflac to focus more strongly on its best prospects for fundamental growth. Even though many people still misunderstand what Aflac does and the market it serves, shareholders are quite familiar with the success that the company has generated over the years.

White duck with yellow beak holding blue cellphone in a wing.

Image source: Aflac.

Stacking the deck

Trex is a specialist in decking materials, with its alternatives to traditional wood decks offering homeowners a distinct advantage in terms of durability and maintenance needs. In a strong economy that has seen big gains for the housing market in many areas throughout the country, Trex has catered to the desires of those looking to improve their existing homes to their own specifications. In its most recent quarter, Trex managed to boost earnings by nearly a third and saw sales climb substantially, as well. All signs point toward continued growth for the decking specialist.

In May, Trex said that it would do a 2-for-1 split effective June 18. In justifying the move, CEO James Cline pointed to the company's "positive outlook," including rising market share for its alternative products against wood-focused competitors and greater success in cross-selling efforts. By serving both residential and commercial customers, Trex hopes to take maximum advantage of its opportunities as long as favorable conditions in the industry last.

Looking healthy

Herbalife Nutrition has been a controversial stock for years, with high-profile battles among well-known investors with opposing views on the nutritional specialist. Some attack Herbalife's business model, accusing it of being akin to a pyramid scheme, while others laud the company's ability to draw and retain customers. Recently, it's been those favoring Herbalife who've been proven right as the company has moved forward aggressively after paying a $200 million fine in 2017 to settle allegations from the Federal Trade Commission.

Back in February, Herbalife announced a series of measures intended to enhance shareholder value, including a 2-for-1 stock split subject to shareholder approval. Herbalife investors approved the move at the company's April annual shareholder meeting, and the split was made in May. Time will tell whether Herbalife's corporate shifts will be effective in promoting further growth, but for now, longtime shareholders are quite comfortable with  their company.

Watch for splits

Stock splits aren't a huge deal, but they can often point you to companies that have already seen considerable success. Fortunately, the split doesn't have to be the end of the growth story, and Herbalife, Trex, and Aflac all have good prospects for further gains in the foreseeable future.

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