S&P 500: 11 Big $600-A-Share Stocks Really Ought To Split After Tesla

Investors love the idea of ​​stock splits in the S&P 500, including Tesla (TSLA). And there are plenty of other stocks that could still do it.




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Eleven stocks in the S&P 500, excluding Tesla, trade for more than 600 a share — making a 2-for-1 split more than doable, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. Those high-priced stocks include homebuilders NVR (NVR), auto parts seller AutoZone (AZO) and burrito chain Chipotle Mexican (CMG).

Splits are a hot topic on Wall Street as Tesla (TSLA) shareholders vote on plans for a 3-for-1 stock split on Aug. 4. Tesla would follow five other S&P 500 stocks to split their shares this year.

“A split does not change the company’s fundamentals in any way and would only make a very high share price more palatable for those unwilling to spend a large chunk of change for a single share,” said Bespoke Investment Group. “As such, one could argue that a split also shouldn’t impact how a stock trades too dramatically.”

Where Have All The S&P 500 Splits Gone?

Stock splits are way down in number. And that’s opening an opportunity for more to come.

The median S&P 500 stock price is now 105 a share. That’s up more than 45% in just five years, even amid a downturn this year. And that is in part because the number of stock splits is collapsing. Last year, less than 10 S&P 500 companies split their shares, says Bespoke. That’s down from the more than 60 S&P 500 firms that pulled off splits in 2005.

But don’t worry about the death of splits. Investors don’t seem to mind much anyway.

Shares of the five S&P 500 stocks to split their shares this year are down 16% on average. The only S&P 500 stock to split this year that’s up is WR Berkley (WRB), which has gained nearly 12%. On the other hand, shares of Dexcom (DXCM), which split 4-for-1 back in June, are down more than 34% on the year.

$600 A Share! Where The Next Splits Might Come From?

Berkshire Hathaway, at 443,720 a share, is the highest-priced stock in the S&P 500. But it’s not a split candidate, as the company has a lower-priced class B share trading for roughly 300 for the price-sensitive investors.

But the next-highest-priced stock is one that many investors think a split is long overdue. That’s homebuilder NVR, which trades for 4,415 a share. The stock, though, is mostly held by institutions. Vanguard owns 11% of the company and Capital Group nearly 9%. These types of large investors aren’t nearly as interested in splits as individual investors.

Vanguard is also the largest holder of high-priced AutoZone shares. The mutual fund giant owns 10% of the stock, which trades for nearly 2,200 a share. And it’s the No. 2 holder of another S&P 500 with a nosebleed stock price: Chipotle. Shares of Chipotle trade for nearly 1,600 a share.

With S&P 500 stock prices this high in a down market, it’s only a matter of time until splits start appearing again.

Time For S&P 500 Splitsville?

S&P 500 companies with the highest per-share stock prices above 600 a share

Company Symbol Stock price on Aug. 4 Sector
Berkshire Hathaway (BRKA) 442,149.00 Financials
NVR (NVR) 4,381.87 Consumer Discretionary
AutoZone (AZO) 2,164.13 Consumer Discretionary
Booking Holdings (BKNG) 1,947.25 Consumer Discretionary
Chipotle Mexican Grill (CMG) 1,584.33 Consumer Discretionary
Mettler-Toledo (MTD) 1,346.88 Health Care
Tesla (TSLA) 925.90 Consumer Discretionary
O’Reilly Automotive (ORLY) 706.92 Consumer Discretionary
BlackRock (BLK) 696.01 Financials
Equinix (EQIX) 697.00 Real Estate
TransDigm Group (TDG) 635.91 Industrials
Regeneron Pharmaceuticals (RAIN) 614.96 Health Care
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @Matt Krantz

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