In addition to being a dismal year for the stock market, 2022 might go down as the year of the stock splits. Several well-known companies conducted stock splits last year.
Many investors were especially glad to see Amazon's (AMZN +3.64%) 20-for-1 stock split in June. Could there be another round of stock splits this year? It's possible. Here are three stocks that are even better candidates for stock splits in 2023 than Amazon was last year.
1. NVR
Amazon's share price at the market close before its stock split was $2,447. That's certainly a lofty enough level to warrant a split. However, it pales in comparison to NVR's (NVR +1.39%) current share price of around $5,380. The company has never conducted a stock split, but doing so would make its shares more affordable for retail investors.
NYSE: NVR
Key Data Points
NVR ranks as one of the biggest residential homebuilders in the U.S. The company serves 35 major metropolitan markets across 15 states and operates under three brands: Ryan Homes, NVHomes, and Heartland Homes. It also provides mortgage banking services.
You might think that higher interest rates could dampen growth for construction stocks. That hasn't been the case for NVR. The company recently reported that its revenue and earnings soared 22% and 36% year over year, respectively, in the fourth quarter of 2022.
Although NVR stock fell throughout much of the first three quarters of 2022, it's been on a roll over the last three months. Despite that momentum, NVR still appears attractively valued based on its free-cash-flow generation.
2. Seaboard
Seaboard (SEB +2.59%) appears to be another great prospect to conduct a stock split this year. Its share price is hovering around $3,940 right now, and like NVR, Seaboard has never split its shares.
NYSEMKT: SEB
Key Data Points
The company is an agricultural and transportation conglomerate with operations on four continents. Its primary businesses include pork production and processing in the U.S., containerized shipping in the Western hemisphere, and grain processing and commodity trading in Africa, the Caribbean, Europe, and South America.
Seaboard experienced some challenges related to COVID-19. However, its business tends to be relatively stable overall. While the stock market plunged last year, Seaboard's share price fared pretty well, even with multiple up-and-down swings.
The company's Commodity Trading & Milling segment has recently been its biggest growth driver. But Seaboard's pork and marine transportation businesses have also delivered solid growth.
3. Booking Holdings
Booking Holdings (BKNG +2.20%) has conducted one stock split in its history -- a 1-for-6 reverse stock split back in 2003. Booking looks like a great candidate for a regular stock split now, though, with its share price close to $2,480.
NASDAQ: BKNG
Key Data Points
The company was originally called Priceline.com but changed its name in 2018. It's now the top provider of online travel services, with six primary brands: Booking.com, Priceline, OpenTable, Rentalcars.com, agoda, and KAYAK.
Booking stock was hammered throughout much of last year. In 2023, though, the online travel company's shares are up more than 20% so far. The company's business continues to boom as worries about COVID-19 wane. Booking's revenue in Q3 2022 jumped 29% year over year, and its earnings soared 117%.
Bet on a split?
Some investors love stock splits because they anticipate the moves will provide solid catalysts. Should you bet on a stock split for NVR, Seaboard, or Booking Holdings? No. All three stocks have traded at high levels for several years without conducting a stock split.
However, that doesn't mean none of these stocks are good picks. My favorite of the three is Booking. I think the company's strong growth prospects as the travel industry continues to recover should enable the stock to deliver market-beating returns over the next several years.
