Stock splits truly boost stock prices—but not for the reason you think.

The rise in stock price following a split reflects correlation—not causation. Stock splits are enjoying a resurgence, and markets are swiftly rewarding companies that announce them. Alphabet (Google’s parent company), Amazon, Tesla, and GameStop are among the latest batch of firms seeking shareholder approval for splits—each enjoyed a post-announcement stock-price bump. Beyond increasing the number of shares outstanding, a split changes nothing fundamental—making the subsequent price rise puzzling, especially for proponents of the efficient-market hypothesis. Ultimately, market enthusiasm stems less from the split itself and more from the signal it sends: that the company is poised for continued success. Firms tend to pursue splits precisely because their share prices have recently surged—and stocks exhibiting positive momentum often keep rising. “Stock splits themselves create no value nor destroy any,” says Christopher Harvey, Head of Equity Strategy at Wells Fargo Securities. “Stocks that split typically exhibit positive price momentum, strong overall fundamentals, and improving underlying business conditions. That’s what the market is really reacting to—and splits tend to occur only in such favorable circumstances.” In other words, the relationship between splits and price gains reflects correlation—not causation. But the numbers speak volumes: According to Bank of America Securities researchers, since 1980, S&P 500 stocks announcing splits have, on average, outperformed the index by 16 percentage points over the following 12 months. In recent years, major tech names—including Apple, Nvidia (NVDA), and Tesla—have announced splits, all boasting high share prices. Yet lesser-known firms—including Sherwin-Williams (SHW), Amphenol (APH), and McCormick (MKC)—have also joined the trend. Dow Jones Market Data shows that, on average, roughly 20 U.S. publicly traded companies execute splits annually over the past decade. The true golden age of stock splits was the late 1990s tech bubble. From 1997 to 2000, an average of 65 U.S. companies split their shares each year as the market peaked. Splits surged again in the years preceding the global financial crisis—and rebounded once more near the end of another bull market. Today, the median share price among S&P 500 constituents stands at approximately $118. Yet several firms trade far above this level—making them potential split candidates. The most expensive U.S. stock is Berkshire Hathaway’s Class A shares (BRK.A), which have never been split and recently traded at $517,000—changing hands only a few thousand times per day. Warren Buffett may never split these shares, but investors have another option: Berkshire’s Class B shares, equivalent to 1/1,500th of a Class A share—or roughly $350 recently.

U.S. inflation data surges? These three U.S. stocks offer ‘inflation hedging’.

1. Verizon Communications Verizon, a telecommunications giant, is the largest U.S. mobile carrier, with core businesses spanning voice services, fixed broadband, and wireless communications. In 5G, Verizon has invested billions of dollars building cell towers—becoming the first U.S. company to launch commercial 5G service. As of December 31, 2020, Verizon—through its subsidiary Verizon Wireless—served 121 million customers, including 94 million wireless retail subscribers, 7 million broadband users, and 4 million Fios video customers. Its business model enables it to pass most costs onto consumers without significant customer attrition. Moreover, the stock offers a forward dividend yield of nearly 5% and has raised its dividend for 15 consecutive years. Over the past three years, its share price has risen over 10%, while the S&P 500 gained nearly 70%. Though it underperformed the broader market, Verizon’s stability makes it resilient amid rising inflation and interest rates. Overall, Verizon’s steady yield, highly sticky ecosystem, generous dividend, and low valuation render it an ideal inflation-hedging stock among U.S. tech dividend names. 2. Texas Instruments (TI) Texas Instruments manufactures embedded chips and analog circuit components for consumer electronics, automotive systems, and industrial machinery. Unlike Qualcomm—which outsources chip manufacturing—TI produces its own chips. This vertically integrated business model helped TI successfully navigate the recent global chip shortage. Compared to peers, TI exerts stronger control over its supply chain and operating costs—giving it inherent inflation resistance. Over recent years, cost reductions stemming from its transition from 200mm to 300mm wafers have significantly lowered manufacturing expenses and boosted gross margins. Since 2004, TI has raised its dividend for 18 consecutive years; its current forward dividend yield stands at 2.12%, with a sustainable payout ratio of 52%. Over the past three years, its share price has surged over 100%, yet its forward P/E ratio remains a reasonable 23x. Its attractive valuation, healthy dividend yield, and stable operations make Texas Instruments a reliable, inflation-resistant tech stock. 3. Williams Companies (WMB) Williams Companies is an energy infrastructure firm focused on natural gas exploration, production, gathering, processing, and transportation. Among WMB’s assets are natural gas pipelines stretching from the Rocky Mountain region to the Pacific Northwest—and export facilities along the East Coast. As of December 31, 2019, Williams owned and operated over 30,000 miles of pipeline, handling nearly one-third of all natural gas consumed by U.S. commercial and residential customers.

Sherwin-Williams Co (SHW) Stock Up 3.8% and Still Undervalued -- GF Score: 86/100

5 days ago

Sherwin-Williams shares rose 3.8% to $336.92, trading below GuruFocus' undervaluation estimate despite strong profitability scores. Significant insider selling over the past year suggests caution for investors.

GuruFocus

2026-05-01

Sherwin-Williams Co. Stock Outperforms Competitors Despite Daily Losses

2026-05-05

Sherwin-Williams Stock Is Down 18% From Its High Despite a Q1 Beat. Here’s What’s Driving the Move

2026-05-06

Mitsubishi UFJ Asset Management Co. Ltd. Purchases 24,742 Shares of The Sherwin-Williams Company $SHW

2026-05-08

Sherwin-Williams Increases Freight Utilization by 11% with Retail Store Delivery Solution by ITS Logistics

2026-06-26

Sherwin-Williams Attracts Fresh Institutional Investment, Shares Hold Above Key Moving Averages