Is Costco Wholesale Planning a Stock Split? 1 Thing Management Might Be Waiting For

Motley Fool03-29

Stock splits don't make a stock a better buy or even change your investment value, but they can make a stock more accessible to investors. Costco could justify doing a stock split given its ...

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1 Thing Management Might Be Waiting For\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-03-29 17:54 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2024/03/29/is-costco-wholesale-planning-a-stock-split-1-thing/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Stock splits don't make a stock a better buy or even change your investment value, but they can make a stock more accessible to investors.\n\n\n\n\n\n\n\nCostco could justify doing a stock split given its ...</p>\n\n<a href=\"https://www.fool.com/investing/2024/03/29/is-costco-wholesale-planning-a-stock-split-1-thing/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"COST","symbol_name":"好市多","start_time":0,"source_url":"https://www.fool.com/investing/2024/03/29/is-costco-wholesale-planning-a-stock-split-1-thing/","article_id":"2423552954","we_media_id":null,"thumbnails":["https://g.foolcdn.com/image/?url=https%3A%2F%2Fg.foolcdn.com%2Feditorial%2Fimages%2F770401%2Fpeople-at-a-business-meeting-reviewing-results.jpg&op=resize&w=165&h=104"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2423552954","pubTimestamp":1711706040,"sourceInfo":{"source_id":"fool_stock","name":"Motley Fool"},"weMediaInfo":null,"summary":"Could there be a magic number Costco's management has in mind before doing a stock split?","collect":0,"end_time":0,"defaultTopTitle":"fool.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"COST":"好市多","BK4532":"文艺复兴科技持仓","IE0004445015.USD":"JANUS HENDERSON BALANCED \"A2\" (USD) ACC","BK4592":"伊斯兰概念","LU0097036916.USD":"贝莱德美国增长A2 USD","LU0689472784.USD":"安联收益及增长基金Cl AM AT Acc","BK4534":"瑞士信贷持仓","LU0861579265.USD":"联博低波幅策略股票基金A","BK4533":"AQR资本管理(全球第二大对冲基金)","LU0786609619.USD":"高盛全球千禧一代股票组合Acc","LU0211327993.USD":"TEMPLETON GLOBAL EQUITY INCOME \"A\" (USD) ACC","LU0130103400.USD":"Natixis Harris Associates Global Equity RA USD","BK4525":"远程办公概念","LU1551013425.SGD":"Allianz Income and Growth Cl AMg2 DIS H2-SGD","BK4538":"云计算","BK4527":"明星科技股","LU0211328371.USD":"TEMPLETON GLOBAL EQUITY INCOME \"A\" (MDIS) (USD)   INC","LU0557290698.USD":"施罗德环球可持续增长基金","LU0943347566.SGD":"安联收益及增长平衡基金AM H2-SGD","LU0528227936.USD":"富达环球人口趋势基金A-ACC","BK4503":"景林资产持仓","IE00BJJMRX11.SGD":"Janus Henderson Balanced A Acc SGD","LU0456855351.SGD":"JPMorgan Funds - Global Equity A (acc) SGD","LU2237443382.USD":"Aberdeen Standard SICAV I - Global Dynamic Dividend A MIncA USD","LU0385154629.USD":"贝莱德营养科学基金A2","LU0079474960.USD":"联博美国增长基金A","BK4155":"大卖场与超市","LU0312595415.SGD":"Schroder ISF Global Climate Change Equity A Acc SGD","LU1551013342.USD":"Allianz Income and Growth Cl AMg2 DIS USD","LU2237443549.SGD":"Aberdeen Standard SICAV I - Global Dynamic Dividend A MIncA SGD-H","LU0056508442.USD":"贝莱德世界科技基金A2","BK4504":"桥水持仓","LU2095319765.USD":"Natixis Thematics Subscription Economy R/A USD","IE00B1XK9C88.USD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A\" (USD) ACC","LU0719512351.SGD":"JPMorgan Funds - US Technology A (acc) SGD","LU1803068979.SGD":"FTIF - Franklin Technology A (acc) SGD-H1","LU0061474960.USD":"天利环球焦点基金AU Acc","LU2237443622.USD":"Aberdeen Standard SICAV I - Global Dynamic Dividend A Acc USD","LU0471298777.SGD":"Blackrock Nutrition A2 SGD-H","LU2210150020.SGD":"Natixis Thematics Subscription Economy R/A SGD","IE00BJJMRY28.SGD":"Janus Henderson Balanced A Inc SGD","BK4514":"搜索引擎","LU0494093205.USD":"贝莱德ESG灵活多元资产A2 USD-H","GOOG":"谷歌","IE00BKDWB100.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5H\" (SGDHDG) ACC","LU2210149790.SGD":"Natixis Thematics Subscription Economy R/A SGD-H","LU1914381329.SGD":"Allianz Best Styles Global Equity Cl ET Acc H2-SGD","LU0820561909.HKD":"ALLIANZ INCOME AND GROWTH \"AM\" (HKD) INC","LU0128525689.USD":"TEMPLETON GLOBAL BALANCED \"A\"(USD) ACC","GOOGL":"谷歌A"},"translate_title":"好市多批发计划股票分割吗？管理层可能在等待的一件事","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"COST":1,"GOOG":0.81,"GOOGL":0.81},"content_text":"Stock splits don't make a stock a better buy or even change your investment value, but they can make a stock more accessible to investors.\n\n\n\n\n\n\n\nCostco could justify doing a stock split given its high price.\n\n\n\n\n\n\n\nRecent stock splits could offer clues as to why management may want to hold out for a higher price.\n\nStock splits often happen when a stock's price gets high enough that management feels inclined to lower it to make it more accessible to a wider pool of investors. If a stock is trading at hundreds or thousands of dollars, investors who aren't able to buy fractional shares may not be able to own the stock. But with stock splits, companies can reduce their share prices, thus making them a useful tool for that purpose.One prime stock split possibility that investors may be wondering about is Costco Wholesale (COST 0.07%). At around $730 per share, it's one of the more expensive stocks on the S&P 500. It may only be a matter of time before management decides to deploy a stock split. Here's what it could take.What do recent stock splits tell us?A company doesn't need to deploy a stock split. It's an optional move that ultimately means nothing for investors who own the stock -- they'll just end up owning more shares at a lower average price, but their overall investment value will remain unchanged.But let's take Chipotle Mexican Grill as an example. The popular casual restaurant chain recently announced a mammoth 50-for-1 stock split. Trading at nearly $3,000 per share, the stock can split at such a high basis that even after the split, it will still be trading at more than $50.A few years ago it was tech companies that were eager to jump on the stock-splitting hype. In 2022, Alphabet announced a 20-for-1 stock split. Amazon followed suit a month later with its own 20-for-1 split announcement as well.Two things that stand out to me are that these companies have been opting for nice, large, round numbers, and they are careful not to make their stocks look too cheap afterwards. Alphabet and Amazon both trade at more than $100 today. Apple did a more modest 4-for-1 split in 2020, but part of the reason it didn't do a bigger split was probably because it wanted to keep its price around $100 afterwards -- at the time of the announcement, it was trading close to $400.The price may not be high enough for Costco to do a splitNow let's turn back to Costco. Here's what its stock price would look like after various stock-split ratios, assuming the stock is around $730 at the time the split occurs.Stock SplitCostco Post-Split Price20-for-1$36.5015-for-1$48.6710-for-1$73.007-for-1$104.29Calculations by author.If it were to do a 20-for-1 stock split, that would put its price at less than $40. That's well below what tech stocks have aimed for, and even below Chipotle's likely future price point. Even on a 15-for-1 basis, Costco's stock would be at slightly less than $50. Only on a 7-for-1 basis would its share price stay above $100.Costco could do a modest stock split and not go for a round number, but this is Costco, a company that's not known for doing anything small, or even selling anything small. When it paid a special dividend last year, it was a whopping $15 per share -- more than three times its annual dividend rate.I don't think Costco is going to hold out forever. But I don't think it starts to consider a stock split until the stock price hits at least the $1,000 mark, which would be a great achievement. And at that point, a 20-for-1 split would leave the stock at around $50.But even that might be too low for Costco. Again, this is the company that likes to go big. And if it can't do a big stock split, it just might not do one at all.Costco is still a fantastic long-term buy, regardless of what it doesFor investors, if Costco splits its shares or not doesn't matter. This is still a remarkable business that has generated $249 billion in revenue over the trailing 12 months, with profits totaling $6.8 billion.The company still has a lot of growth in its future, and while its earnings multiple may seem high at around 50 times its trailing profits, for buy-and-hold investors looking for an investment they can hang onto forever, Costco is a terrific growth stock.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2423552954"}