I’ve More Than Quintupled My Stake in This Historically Cheap Legal Monopoly That Just Conducted a Reverse Stock Split
2024-09-26 11:51:00
Although nothing has been more popular with the investing community than artificial intelligence (AI) in 2024, the euphoria surrounding stock splits can, arguably, give AI a run for its money.
A stock split is a tool publicly traded companies have at their disposal that gives them the option of adjusting their share price and outstanding share count by the same factor. Keep in mind that stock splits are purely surface scratching and have no impact on a company’s market cap or its operating performance.
Most investors tend to gravitate to companies announcing forward stock splits. A forward split is designed to reduce a company’s share price to make it more nominally affordable for retail investors and/or employees who lack access to fractional-share purchasing with their broker. This type of split is almost always announced by businesses that are out-executing and out-innovating their competition.
Furthermore, recent weakness in its shares has lifted the company’s annual yield to 4.2%. Sirius XM’s board is committed to sustaining the company’s annual payout of more than $1 per share.
Sirius XM may not be a sexy stock selection when compared to high-growth/high-flying AI stocks, but it’s a historically cheap legal monopoly that should, over time, deliver solid returns for patient investors.
Should you invest $1,000 in Sirius XM right now?
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Sean Williams has positions in Sirius XM. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
I’ve More Than Quintupled My Stake in This Historically Cheap Legal Monopoly That Just Conducted a Reverse Stock Split was originally published by The Motley Fool
