What signs can an investor pay attention to when looking for a stock to split? and Stock ...Church

What signs can an investor pay attention to when looking for a stock to split?

How can a person tell if a stock will split? What signs can an investor pay attention to when looking for a stock to split?


Stock best answer:

Answer by MikeM_FINA4242
Generally a stock split will happen for one of 2 reasons:
1) the company pays a regular dividend, but doesn't want to pay one this time around. They would then call the stock split a stock dividend, but essentially they are the same thing.

2) If the stock price is above what the company considered their optimal range. For example, if Company A feels their stock trades best at a price between $ 15-$ 45 then they will leave it alone. If all of a sudden the stock is trading for a long period of time at $ 70, the company would split the stock to bring the price back into the optimal range.

Signs of a split: if a company has a regular dividend coming, but earnings are down this year you may see a split instead of a cash dividend. Also if the company stock is trading much higher than its averages have been for the past few years then a split may be on the horizon as well.

Hope this helps!

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