At the end of 2025, Costco Wholesale (COST +1.08%) seemed like a candidate for a 2026 stock split. Shares closed at just above $862 on Dec. 31, 2025, and if the stock price gained more momentum, $1,000 looked reachable.
It's been above or flirting with that $1,000 threshold throughout the year, leaving many wondering whether a Costco stock split announcement is imminent. According to history, the answer is unlikely. But that's not bad news for shareholders, as we'll see in just a moment.
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The benefits of a split
Analysts and shareholders want to see stock splits when the stock price is perceived as too high, limiting its appeal to retail investors. For example, if a stock is trading for $1,000 and undergoes a 10-for-1 forward stock split, the new price will be $100 per share. The value of what you own doesn't change, but the stock price will just be lower after the split.
Again, this is more about investor psychology. Someone buying 10 shares of $100 stock may feel they are getting more for their money than they would buying one share for $1,000, even though the total value of those holdings will be the same.
In addition to the psychology effect, there is some evidence that a stock split can trigger short-term gains. Bank of America's Research Committee found that companies that split their stock saw an average total return of 25.4% a year following the announcement of a split.
Still, history suggests that a stock split shouldn't be expected any time soon. That's not to say it couldn't happen at some point in the future, but the last time Costco split its stock was in 2000, meaning it doesn't make such decisions lightly or often. With more investors having access to fractional shares, the management team may not see an imminent need for a stock split. That may disappoint some, but it's also a strong signal for long-term investors.
NASDAQ: COST
Key Data Points
No stock split? No problem
Not performing a stock split can be a vote of confidence from the management team that they expect the stock price to increase without any type of financial engineering. That's a good sign for long-term shareholders, as the management team isn't trying to manufacture a catalyst that might create a short-term stock price jump and offer little else.
A higher share price also indicates that the company is valuable. If people thought it was overvalued, they wouldn't be paying over $1,000 per share for it.
Costco is still rewarding long-term shareholders in a different way than with a stock split -- not only via its dividend payouts, but also with its special dividend payouts. It paid a special dividend of $15 per share in January 2024, and a special dividend of $10 per share in December 2020.
Pair the consistent dividends and special dividends with a stock price that has returned over 170% in the last five years, and Costco has proven that it can reward long-term shareholders, even without a stock split.
