Please ensure Javascript is enabled for purposes of website accessibility

National Beverage Plans a Mid-Month 2-for-1 Stock Split

By Rhian Hunt - Updated Feb 5, 2021 at 3:29PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The split will be handled as a stock dividend.

The parent of the LaCroix sparkling water and Shasta soft drink brands, National Beverage Corp. (FIZZ 2.42%), announced an upcoming stock split today. The company's press release refers to the event as a 1-for-1 stock split, but such a split is not actually part of investing terminology. National Beverage seems to be actually preparing a 2-for-1 stock split.

The split will occur as a "stock dividend," in which the investors are paid in stocks rather than cash, but the action is handled in a way similar to a dividend payment. Shareholders don't need to pay taxes on shares they receive in this manner, until and unless they decide to sell the newly gained shares. The company will issue a 100% stock dividend, with each shareholder receiving a dividend of shares equal to their existing holdings.

A smiling piggy bank next to rising stacks of coins with blocks atop them spelling out 2021.

Image source: Getty Images.

The company notes "the recent increased market participation by smaller and/or individual investors" trading its shares, and asserts the upcoming split "will enhance market liquidity and provide opportunistic long-term value growth for a wider range of investors." Stockholders will get their new shares on Friday, Feb. 19, with split-adjusted trading beginning the following Monday, Feb. 22.

The company's shares rose 3% in morning trading today but have fallen again. This follows a 27% jump a week ago that was apparently triggered by an attempted short squeeze launched by the small investors coordinating on Reddit to bid up stocks heavily shorted by hedge funds.

Back in December, National Beverage's shares faltered after its reported fiscal second-quarter 2021 revenue fell short of analyst predictions, despite a robust earnings beat. Analyst sentiment is also bearish, with UBS predicting sinking margins as COVID-19 lockdowns begin to end.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

National Beverage Corp. Stock Quote
National Beverage Corp.
FIZZ
$49.45 (2.42%) $1.17

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
338%
 
S&P 500 Returns
119%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.