Contrary to popular belief, stock splits don't alter the value of a business. They just spread its earnings among a greater number of lower-priced shares. It's kind of like slicing up your favorite apple pie. You still have the same amount of gooey goodness. You simply divided it into smaller portions.
Still, investors love stock splits. Perhaps they're right to do so. Companies that split their stock are typically firing on all cylinders -- and winners tend to keep on winning.
If you'd like to accelerate your search for the best stock-split stocks to buy today, read on.
Stock-split stock to buy No. 1: Walmart
Persistent inflation is driving more people to shop for bargains -- and many are heading to Walmart (WMT 0.48%) to find them. The discount retailer's low prices have never been more appreciated by consumers and investors alike.
Walmart's reputation for affordable groceries and other necessities is helping it win sales from higher-priced competitors. As the largest grocer in the U.S., the retail giant obtains the lowest prices from suppliers. These cost savings on food and other goods are attracting more people, including higher-income shoppers, to Walmart's stores.
Importantly, the retailer is also seeing strong gains in its online sales. Rising demand for in-store pickup and delivery services drove Walmart's e-commerce revenue higher by 21% year over year in its fiscal 2025 first quarter, which ended April 30. An expanded selection of goods for sale offered by third-party merchants in the company's online marketplaces also contributed to the gains.
Furthermore, these merchants pay handsome sums to advertise their wares on Walmart's fast-growing advertising network. The retail titan's ad revenue spiked 24% in the first quarter.
These higher-margin businesses, combined with Walmart's automation investments and cost-cutting measures, are enabling profits to grow faster than sales. The company's revenue rose 6% to $162 billion in the fiscal first quarter, while its adjusted operating income jumped 14% to $7 billion.
With its profits booming, Walmart chose to split its stock 3-for-1 earlier this year. And with its value-focused strategy unlikely to go out of style anytime soon, you can expect this retail leader's share price to continue to rise alongside its earnings.
Stock-split stock to buy No. 2: Chipotle Mexican Grill
Chipotle Mexican Grill (CMG 0.20%) is another high-quality business that's winning market share in a huge industry. The Tex-Mex specialist is expanding its sales and profits at a rapid pace at a time when many of its competitors are struggling to lure customers to their restaurants.
Chipotle's secret sauce isn't rocket science. Fresh, tasty, and responsibly sourced food is served quickly to order. Yet it's a recipe that rivals have struggled to replicate.
Moreover, while many restaurant chains are finding it difficult to attract enough people to work in their stores, Chipotle is widely seen as offering a lucrative career path for its employees. Team members can earn as much as $100,000 per year in total compensation in as few as three years.
This dependable funnel of qualified personnel trained on the job to excel is enabling Chipotle to expand its store count at a solid clip. The fast-casual chain opened 47 new restaurants in the first quarter alone. That brought its total store count to nearly 3,500 locations. Management believes that figure could eventually top 7,000 in just North America. The company also has the potential to open many additional stores in international markets like Europe and the Middle East.
Better still, Chipotle's existing restaurants are becoming more profitable. Higher foot traffic and the company's efforts to speed up order processing times helped to boost its comparable-restaurant sales by 7% in the first quarter. Chipotle's restaurant-level operating margin, in turn, climbed to 27.5% from 25.6% in the prior-year period.
With its business booming, Chipotle wants to reward its investors with a stunning 50-for-1 stock split. Shareholders will likely authorize the proposal at the company's annual meeting on June 6. If approved, the stock split -- which would be one of the largest in the history of the New York Stock Exchange -- is slated to take place on June 25.
