A stock split has no fundamental impact on the health of a business but it is something business health investors should pay attention to. Bank of America data shows that companies that split their stock outperform the broader market and deliver leveraged returns over time.
Companies split stocks because their share prices are rising and are expected to continue rising to levels that make ownership difficult for large market segments, including their employees. Their stock prices rise because businesses are fundamentally healthy, either growing strongly or driving cash flow to sustain capital returns. They are expected to continue to grow due to unmet demand; Investors want more.
Regarding ownership, it’s the employees that stock splits tend to help the most. Companies like Broadcom NASDAQ: AVGO, Casey’s General Store NASDAQ: CASYAnd costco Nasdaq: Cost Use options that allow their employees to purchase stock such as ESPPs, RSUs, and stock options. However, with shares trading at around $250, $400, and around $1000 respectively, it is difficult for employees to buy shares and not disrupt the family budget or cause problems for the business. In that case, the company can initiate a stock split to make it easier for its employees and the market as a whole to buy shares without harming budgets, investment goals, or portfolio allocation.
Broadcom: divested in 2024 and may divest again soon
Broadcom today
(as of 12/31/2024 05:45 PM ET)
- 52-week range
- $104.15
▼
$251.88
- Dividend yield
- 1.02%
- P/E ratio
- 201.42
- Price target
- $221.88
Broadcom may have another stock split on the horizon. Up more than 400% in the last two years and 30% since the last earnings report, this is the stock Going up still Trading at $230 is not out of reach for most investors; However, AI-driven growth, strong cash flow, and capital returns will sustain the market’s growth and could soon propel the stock above $500.
Analytical answer The FQ4 2024 report was highly bullish and pointed to a new high for this market, possibly set in early 2025. The increase in analyst sentiment is likely to continue in 2025 due to the momentum and cautious potential shown in the report. Guidance and prediction. The company’s tilt into infrastructure software is paying off, with double-digit growth in that segment at the end of F2024 and the acquisition of VMWare pushing it into the triple-digit range. Both the legacy business and VMWare are expected to gain traction in 2025. Guidance is for revenue growth near 15% in 2025 and acceleration in 2026 and 2027, focused on leading hyperscalar and custom AI accelerators for AI infrastructure.
Casey’s General Stores: Self-funded growth sustains stock price growth
Casey’s General Store today
(as of 12/31/2024 05:45 PM ET)
- 52-week range
- $268.07
▼
$439.68
- Dividend yield
- 0.50%
- P/E ratio
- 27.61
- Price target
- $424.00
Casey’s General Stores’ claim to fame is its ability to pay dividends and buy back shares Self-funding for expansion of this Convenience store empire It is the third-largest U.S. convenience store chain, which recently folded the acquisition of Texas-based Fikes into its portfolio. The company will use the acquisition as a foundation for deepening and expanding penetration in the Southwest, continuing the trends that have lifted its share price over the past two decades. Trading at around $400 per share, the stock has reached a level where a split is likely, and price action is expected to continue the upward trend into 2025.
Costco: Stock splits and special dividends are in its future
Costco Wholesale Today
(as of 12/31/2024 05:45 PM ET)
- 52-week range
- $640.51
▼
$1,008.25
- Dividend yield
- 0.51%
- P/E ratio
- 53.80
- Price target
- $1,011.74
Costco stock trades at around $1000 and is the most likely to split due to the high share price. Continuous development, a Industry-leading positionAnd strong cash flow supports its share price growth, which is expected to continue into 2025. Cash flow is important because it supports business reinvestment, a healthy balance sheet, cash generation, and Capital return. The cash build is important because Costco will pay a special dividend when it reaches a high, which investors are banking on. Trends suggest the level will be reached by late 2025 or early 2026 and could be as high as $15 per share. Trends also indicate that Costco may pay a special dividend every two to four years.
Before you consider Broadcom, you might want to hear this.
MarketBeat keeps track of Wall Street’s top-rated and best-performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified Five stocks That top analysts are quietly telling their clients to buy before the broader market arrives… and Broadcom wasn’t on the list.
While Broadcom currently has a “medium buy” rating among analysts, top analysts believe these five stocks are better buys.
Wondering what will be the next stocks to hit it big, with solid fundamentals? Click the link below to learn more about how your portfolio can blossom.
