Stock-Split Watch: GE Vernova Trades Above $890 With a $176 Billion Backlog. Is a Split Next?
Key Points
GE Vernova is one of the more expensive companies on a per-share basis.
The company's Q3 results saw orders increase by 96% while the backlog approached $200 billion.
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On a per-share basis, GE Vernova (NYSE: GEV) has become one of the most expensive stocks available. The stock trades at $890 per share, with a market cap of $237 billion. This is a steep pullback from recent highs, but the business hasn't slowed, and some investors wonder whether a stock split is coming.
A forward stock split is when a company increases the number of shares outstanding while decreasing the share price. For example, say you own one share of a company trading at $100. If the company offers a 2-for-1 stock split, you would then own two shares at $50 each. The market capitalization doesn't change, nor does the value of your holdings.
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GE Vernova's business is firing on all cylinders. On Oct. 28, the company released third-quarter results showing orders grew organically by 96% year over year, while the backlog reached $197 billion. Free cash flow grew to $5.4 billion. The Power division led the way with nearly $22 billion in orders, a 178% year-over-year increase.
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Since splitting from its parent company in 2024, GE Vernova has yet to split its stock. A share price hovering near four figures can deter investors from buying due to its perceived high price. A split brings the price per share down to more attractive levels. The original parent company, General Electric (now GE Aerospace), forward split its stock nine times between 1971 and 2023 before splitting into three separate companies, including GE Vernova.
These days, many brokerages offer fractional shares, which lessens the need for a stock split. GE Vernova's management has also been more focused on buybacks lately, and the company increased its share repurchase authorization from $10 billion to $20 billion in October.
With shares trading well off all-time highs, I wouldn't expect a split unless the price remains above $1,000 per share for an extended period. A stock split isn't necessarily a reason to buy, but the underlying business fundamentals certainly are for GE Vernova.
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Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends GE Aerospace and GE Vernova. The Motley Fool has a disclosure policy.
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