The value of a stock split is exactly zero. The non-event gives you 12 slices of a pizza instead of six. A company splitting its $200 per share stock 4-to-1 gives you three extra shares, but each will be worth $50 a pop. Nothing else really changes about the fundamentals of the business. So why do companies do stock splits and why do investors love them? Because they tend to signal bullish sentiments about the future. 

 Just remember, if a business isn’t good, it doesn’t matter if the company splits its shares or if you buy the stock before or after the split occurs. 

Yet in 2024, stock splits are becoming popular. There have been several high-profile stock splits this year, including Broadcom (NASDAQ:AVGO) and Nvidia (NASDAQ:NVDA), both of which split their shares by a 10-for-1 ratio.

While these top-shelf stocks are arguably still worth the price of admission, below are three more stock-split stocks that are excellent companies to buy now.

Key Points About This Article:

• Stock splits are popular with companies and investors although they do not change the underlying fundamentals of the business.
• This year has seen a large number of companies split their shares and the three stocks below are attractive whether you buy them before or after the split.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

Chipotle Mexican Grill (CMG)

Fast-casual chain Chipotle Mexican Grill (NYSE:CMG) completed one of the largest stock splits in the history of the New York Stock Exchange in June when it split its shares 50-to-1. The stock went from almost $3,300 down to $65 a stub. However, Chipotle’s stock became even cheaper afterward. Although it has bounced off its lows, shares remain 14% below the post-split price and are down 20% from their all-time high.

While the Mexican food restaurant has been a phenomenal investment over the past decade and tripling in value, the market is concerned about slowing growth. Its second-quarter earnings report offered comparable sales guidance in the mid- to -high-single-digit range, a marked slowdown from the 11% rate it saw in the second quarter, though in-line with the 7.9% growth it achieved in 2023 and 8% rate in 2022.

That suggests the selloff in shares is an opportunity for investors. Despite CEO Brian Niccol jumping ship for Starbucks (NASDAQ:SBUX), which pushed shares down further, Chipotle Mexican Grill is a fine business with plenty of growth still ahead.

Cintas (CTAS)

Corporate uniform provider Cintas (NASDAQ:CTAS) is the second stock-split stock to buy. It won’t be dividing its shares until Sept. 12, but it is a business worth buying regardless of when you pick up the stock. The split will be at a 4-for-1 ratio.

Cintas services over 1 million companies. In addition to uniform rentals, it also provides mats, mops, restroom supplies, and first aid and safety products. That sort of diversification where no single customer represents more than 1% of its revenue ensures Cintas does not need to worry about any one customer disrupting its business should it switch suppliers or go under.

Cintas is the dominant player in the $20 billion uniform rental industry with a 30% market share. That helps to explain why its stock has been a massive winner for investors. Over the past decade, CTAS stock has returned 1,280% to shareholders compared to just 239% for the S&P 500. Over the past 20 years the stock nearly doubled that performance with a 2,440% gain (the index is up just 655%).

Cintas stock trades at $805 per share, which means it will be in the $200 per share range after the split. While recessions can impact the stock, the bull markets that follow lift its shares even higher afterward making any dips in the price perfect times to pick up more.

Lam Research (LRCX)

An even better performer than the uniform rental company is Lam Research (NASDAQ:LRCX), a manufacturer of specialized semiconductor equipment. Its stock has returned over 4,100% over the past two decades, and it had been even higher prior to the tech sector selloff that began in July.

Lam Research can be viewed as a picks-and-shovel play on the growth of the advanced chip market for artificial intelligence. It makes etch and deposition tools that allow chipmakers to make denser chips critical for the sophisticated and advanced packaging techniques required by AI. 

According to Lam, its equipment is a $1 billion opportunity per 100,000 wafer starts per month capacity. Demand is also high for its extreme ultraviolet (EUV) lithography machines where it has about a 75% share of the market.

Lam Research will be splitting its stock 10-for-1 on Oct. 2. Shares trade at $821 a stub today, meaning they will be worth around $82 after the split. As mentioned, the stock sold off beginning in July and is down 21% from its high. With demand for AI chips continuing to expand, though, expect to see sales of LCRX’s specialized equipment keep growing.

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