Capital Markets

Stock Splits Galore

Many of the companies are eager to increase their floats and attract a larger investor base.
Stephen TaubJanuary 29, 2004

It’s the natural by-product of a surging stock market: A rash of companies are rushing to split their stocks. And although you might associate a stock split with a triple-digit share price, in most cases the shares are trading in the double digits.

Many of the companies have relatively small market capitalizations and are eager to increase their floats and attract a larger investor base.

“Given the sustained strength in the company’s stock price, we are able to make Marine Products’ stock more widely available to potential investors,” said Richard A. Hubbell, chief executive officer of Marine Products, a $331 million market-cap company that announced a 3-for-2 stock split and a 50 percent increase in its dividend. These measures “are not only a way to reward our current stockholders,” added Hubbell, “but may also potentially increase the liquidity and investment appeal of our common stock.”

William J. Nutt, chairman and chief executive officer of Affiliated Managers Group Inc., which authorized a 3-for-2 split with its shares trading around $82, stated, “The split will benefit our shareholders by enhancing the marketability and broadening the distribution of AMG common stock.”

Some large companies are reaching out, too. For example, Canadian National Railway Co., which has an $11.6 billion market cap, said its board approved a 3-for-2 stock split. In a statement, E. Hunter Harrison, president and chief executive officer, said that the stock split “will improve liquidity and increase the float of CN shares. This will benefit the company and its shareholders by ensuring CN shares are more accessible to individual investors.”

Many other companies, large and small, have recently announced stock splits:

  • Fidelity National Financial Inc., the largest U.S. title insurer, declared an 11-for-10 split. Its stock is trading at around $42.
  • Exelon Corp., trading around $66, declared a 2-for-1 split.
  • Alberto-Culver Co., trading around $62, said it will split its stock 3-for-2 and increase its quarterly dividend payment by 43 percent.
  • Sterling Financial Corp. declared a 5-for-4 stock split. Its stock is currently trading around $29.
  • Schnitzer Steel Industries Inc. announced a 3-for-2 stock split for both classes of its common stock, trading around $42.
  • Cal-Maine Foods Inc., trading around $25, announced a 2-for-1 split.
  • Oneida Financial Corp., a savings and loan, said its board approved a 3-for-2 stock split. It is trading around $22.