Google (GOOG) Stock Split: Is Google Stock Worth Buying Now? | Google Stock Analysis
When a company grows, develops, and accumulates value, its stock typically performs well over the long term. In the case of Google's parent company, Alphabet, its shares have increased in value nearly 42-fold since going public in 2004.
Currently, Alphabet shares cost $2,300, making them a bit pricey for most retail investors. To address this issue and make the stock more accessible, Google will conduct a 20-for-1 stock split after the market closes on July 15th. Incidentally, Amazon recently conducted a similar 20-for-1 split.
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A stock split is the division of a single share into several parts. In our case, Google decided to split one share into 20 shares. This means that if you own one share of the company, after the split you'll receive an additional 19 shares, bringing your total to 20. The price will therefore drop by a factor of 20.
So, if the split had occurred at the current price of $2,304, it would have become $115 after the split. However, a lower price doesn't mean the share price has become cheaper. It's like changing one $100 bill for two $50 bills.
According to Bank of America data, since 1980, stocks of companies that split their shares have grown by an average of 25% over the course of one year, while the broader market has shown growth of only 9%.
Google shares are up 150% over five years.
Market cap: $1.5 trillion
P/E: 20
ROIC: 13.6%
Revenue: $270 billion
Net income: $74 billion
Free cash flow: $69 billion
Balance sheet: $139 billion in cash.
Let's calculate for 10 years and assume 8, 10, and 12% growth.
Alternatively, you can choose a more passive investment option through broad market index funds, also known as ETFs. For example, an ETF on the S&P 500 yields an average of 9-10% per year.
I hope you enjoyed this video. Let me know in the comments if you think the price will only go up or if it will fall at some point. And don't forget to subscribe and click the bell to stay up to date with future videos on the channel!
#investments #Google #stocks
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*DISCLAIMER! I am not a financial advisor. The information contained in this video is not an advertisement and is for entertainment purposes only. Before investing, please consult with a licensed professional. Any stock purchases I show or discuss in the video should not be considered "investment advice." I am not responsible for any losses you may incur by investing and trading in the stock market in an attempt to mirror my actions.