Jeremy Bowman, The Motley Fool
6 min read
In This Article:
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There have been a few high-profile stock splits this year, most recently O'Reilly Automotive.
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A number of stocks now have share prices over $1,000.
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If the bull market continues, we're likely to see some more stock splits.
Few things garner attention for a stock as much as a stock split. Though a split does nothing to change the fundamentals of a stock or the business, it excites investors for a number of reasons.
First, they're the primary tool by which companies can artificially lower their share prices, thereby making them more affordable to individual investors. Second, they act as a milestone for the stock, essentially resetting its growth path so it can rise again. Third, management chooses the timing of stock splits, and they generally signal confidence from management that the stock can keep going up. If management was not confident about the stock's ability to keep gaining, they would be less likely to issue a stock split.
Finally, there's also evidence that stock-split stocks outperform the S&P 500 over the 12 months following the split, according to research from Bank of America.
While that's not a reason to buy stock-split stocks, it is a reason to pay attention to them. On that note, let's take a look at 10 stocks that could split by the end of 2026.
AutoZone's (NYSE: AZO) chief rival, O'Reilly Automotive, just issued a 15-for-1 stock split, and AutoZone looks like a great candidate for one next year as well. The seller of aftermarket auto parts now trades north of $3,600 per share, making it one of the highest share prices on the stock market. AutoZone has a long track record of growth and performing well in both bull and bear markets. After tripling over the last five years, the stock seems overdue for a stock split.
MercadoLibre (NASDAQ: MELI) is another longtime successful now trading at a lofty share price of around $2,500. The stock is up more than 8,000% since its 2009 IPO but has never had a stock split in its history. The company continues to grow rapidly thanks to its strong positioning in e-commerce and digital payments in fintech, meaning a stock split makes sense at some point, if not by the end of next year.
Costco Wholesale (NASDAQ: COST) is a unique retailer in a number of ways, and that includes its approach to its share price, which is now hovering around $1,000, well above any mass market retailer.
Costco has not done a stock split since 2000, but considering the high share price of the stock and the overall health of the business, a stock split would likely be greeted warmly by investors, especially for retail investors who just have a little cash to spend.