Stock Splits Go ‘Out of Fashion’ for S&P 500: Chart of the Day

Three companies in the Standard & Poor’s 500 Index are splitting their shares this week. A decade ago, this would have been a routine number. Now it qualifies as a deluge.

The CHART OF THE DAY displays the number of splits in S&P 500 stocks each year since 1995, as compiled by S&P. Last year, AmerisourceBergen Corp. was the only company in the index to go this route. The highest total for the past 10 years was 38 splits, recorded in 2004. That’s less than half the peak of 100 in 1997.

“Traditionally, splits were used to keep stocks in a price range,” Howard Silverblatt, a senior index analyst at S&P, wrote yesterday in an e-mail. “The concern was that if prices were too high, investors, especially individuals, would not buy them.” The issue has faded and splits have gone “out of fashion,” Silverblatt wrote.

Data compiled by Bloomberg supports his conclusion. Of 17 stocks in the S&P 500 that closed at more than $100 yesterday, seven have never been split: AutoZone Inc., CME Group Inc., First Solar Inc., Goldman Sachs Group Inc., Google Inc., IntercontinentalExchange Inc. and Mastercard Inc.

Two other stocks, Intuitive Surgical Inc. and Inc., have only had reverse splits. These moves effectively made a single share more costly rather than cheaper, as splits do.

Express Scripts Inc. fell below the $100 threshold after yesterday’s completion of a 2-for-1 split, the first for an S&P 500 stock since AmerisourceBergen took the same action last June 15. General Mills Inc. will carry out a 2-for-1 split today, and Danaher Corp. will follow suit on June 11.

(To save a copy of the chart, click here.)

Before it's here, it's on the Bloomberg Terminal. LEARN MORE