Trying to figure out which high-priced investment will declare a stock split can give you a splitting headache.
It could be worth the throbbing. It may be a zero-sum game, as share count and price adjust proportionally, but investors tend to bid up investments after they announce a stock split. Whether they believe that the split is prompted by improving fundamentals or just a desire to have broader appeal to retail investors, investors are drawn to split candidates.
Let's take a closer look at Booking Holdings (BKNG 2.39%), NVR (NVR 2.60%), and Seaboard (SEB +0.55%), three of four U.S.-listed stocks with the highest price tags. Their high share prices make them potential candidates for a stock split. Unfortunately, just one of them appears to have even a remote chance of declaring a split anytime soon.
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1. Booking Holdings
The online travel specialist behind Priceline, Kayak, and its namesake booking website is the most likely of these names to declare a stock split. It's the one name on this list that has already done so -- only it was a reverse stock split 23 years ago. Booking Holdings was a penny stock in the sudsy aftermath of the dot-com bubble.
This is also the most consumer-facing of the three businesses. This is a point worth making, as it's the one that likely appeals the most to individual investors who won't spring a half-million dollars for a round lot of shares.
Yes, you can buy as little as a single share. You can buy even less than a single share if your broker allows the purchase of fractional shares. But a forward split increases share count and lowers share price, making the stock look more affordable.
NASDAQ: BKNG
Key Data Points
2. NVR
NVR may as well be shorthand for when the popular homebuilder will announce a stock split: NeVeR. The shares trade at $7,762 per share. It's the second-highest price point for exchange-listed companies. The only name with a higher sticker price is Berkshire Hathaway, which I left out of my potential stock-split list because Berkshire Hathaway stock is also available through the lower-priced Class B shares for those looking for a more accessible price point.
NVR has an asset-light business model and a long track record of beating the market. It also has an equally long record of avoiding a stock dividend to bring down the value of its shares. It's not likely to go for a split anytime soon.
3. Seaboard
Finally, we have Seaboard, with the lowest price of the three. Its diversified operations cover pork production, grain processing, and maritime shipping. It's a volatile feast-or-famine business, and that could seal its fate as a potential stock split candidate.
Seaboard has posted double-digit revenue growth in three of the last five years, but negative top-line results for the other two. It could crush the shares if it splits after a strong year, only to see the lower price shrink further during a financial slump. Seaboard doesn't fit the role of a prototypical growth stock, so it's probably not in a rush to go the stock-split route.
