When Will Fastenal Stock Split Again?
Fastenal Company is a reputable provider of industrial and construction supplies, just like Grainger and MSC Industrial. It trades on NASDAQ under the symbol "FAST" and has been listed as a publicly traded company since 1987. Like most other publicly traded companies, Fastenal has had its fair share of stock splits over the years, which have helped to create more shares and lower the cost per share, thereby making the stock more affordable to investors.
However, it has been a while since the company last split its stock. In this article, we will discuss Fastenal's history with stock splits, take a look at some of its current fundamentals, and attempt to make a prediction on when it will split its stock again.
History of Fastenal's Stock Split
Fastenal's first stock split occurred in June 1990, where it split its stock 3-for-2. This means that for every two shares owned, shareholders received one additional share. The second stock split occurred in 1993, where it split its stock 2-for-1. This means that for every one share owned, shareholders received an additional share, effectively doubling the number of shares outstanding.
The most recent stock split occurred in 2004 when Fastenal declared a 2-for-1 stock split. Since then, the company has not carried out any stock splits, even as the stock price has continued to rise steadily. Currently, Fastenal's stock trades at about $50 per share, and the last time the company split its stock, it was trading at $73.
Fastenal's Current Fundamentals
Fastenal's recent financial results show continued growth in sales and profits, despite the impact of the COVID-19 pandemic. Its Q1 2021 earnings report reveals that its net sales increased by 7.8% compared to the same quarter last year. Its net income also increased by 25.2%, and earnings per share rose by 26.2% over the same period.
The company has also recently declared a dividend of $0.28 per share, which is an increase of 7.7% from the previous quarter. This figure marks the 23rd consecutive year that Fastenal has increased its dividend, a testament to its financial stability.
Factors That May Influence Fastenal's Next Stock Split
It can be challenging to predict when Fastenal will split its stock again. Still, there are certain indicators that investors can look out for to gain insight into the company's financial health and its strategy for the future. Here are five factors that could influence the timing of Fastenal's next stock split:
1. Continued Sales Growth - Fastenal has shown impressive growth in sales over the years. Suppose the company can maintain consistent growth in its sales numbers. In that case, there is a good chance that they will split their stock to attract more investors.
2. Rising Earnings - A company's earnings are also an essential factor when contemplating a stock split. If earnings continue to grow, it provides a more bullish outlook for investors and could increase demand for shares.
3. Shareholder Value - One of the primary reasons why a company would split its stock is to increase shareholder value. If Fastenal sees the value of its shares continuing to rise, it may decide to capitalize on this demand by splitting the stock to increase liquidity.
4. Market Conditions - External conditions like market trends, changes in economic policies or fiscal stimulus, interest rates, and other market factors could encourage a company to split its stock.
5. Competitor Pressure - Finally, pressure from competitors, which have already split their shares, could influence Fastenal to split its stock again.
Fastenal has a long history of growth and success, and its current fundamentals show promise for continued growth. While it is impossible to predict when the company will split its stock again, the current market conditions and shareholder value make it a possibility. As investors, we should keep an ear to the ground and monitor the state of the company diligently to make informed investment decisions..