3 tech companies that should start going public

Among recent stock splits Amazon (AMZN 10.36%) and Google Parent Alphabet (GOOGL 1.84%) (GOOG 1.79%)Investors seem anxious to hear about the next company that wants to employ this strategy.

A stock split does not change the financials of a company. The process splits shares, meaning a 2-for-1 stock split doubles the number of shares outstanding, halving the share price. However, a lower nominal value makes whole shares more affordable for small investors, providing a psychological boost. If we are given high nominal values, we feel it. Palo Alto Networks (PANW 1.40%), Free market (Melly 1.24%)And Broadcom (AVGO 0.35%) may benefit from such action.

With shares of this cybersecurity star trading around $500, is it time to split the stock?

Jake Lerch (Palo Alto Networks) With shares trading at around $480 each, Palo Alto Networks is my pick for a technology stock that should start a dividend.

Palo Alto provides cybersecurity solutions for medium to large organizations, including governments, businesses, and nonprofit organizations. The company is divided into two divisions: production, which includes physical and virtual firewall provisions and Subscription and support, Comprised of cloud-based threat intelligence software and consulting services.

With cybercrime a large and growing problem, Palo Alto is well positioned for increased demand for cyber security. According to a study, the global cyber security market will triple from $140 billion in 2021 to $376 billion in 2029.

Moreover, the company’s integrated approach seems to be winning over customers. By offering comprehensive hardware and software solutions, Palo Alto seeks to reduce its customers’ total cyber security costs. With more than 80,000 enterprise customers alone, the results speak for themselves.

Palo Alto generated $5.17 billion in revenue over the past 12 months. Revenue for the quarter was up 29 percent from a year ago. Analysts expect the company to grow sales by 21.5% this fiscal year (ending July 31, 2022) and a further 24% in the next fiscal year.

However, for investors bullish on Palo Alto, the prospect of paying nearly $500 per share may seem like a bridge too far. However, an approximate 5-for-1 stock split would make the stock price manageable at $97/share. That may concern many retail investors who are reluctant to invest in high-value stocks or unwilling to accommodate fractional stocks in their accounts.

This fast-growing e-commerce company is worth a closer look.

Justin Bishop (Mercado Libre): Investors seem to be overlooking e-commerce company Mercado Libre because of its Latin American roots and $800 share price, which makes it difficult for retail investors to accumulate many shares at once. A stock dividend may be just the medicine the stock needs.

For example, a 10-for-1 stock split reduces the stock price from $800 to $80 per share and gives investors 10 shares each. Stock dividends often get attention, but that’s a Good thing Considering how strong MercadoLibre’s business is.

Mercado Libre has a 25% market share of e-commerce sales in the Latin American region. The company Founded in 1999, it has spent years investing and building logistics to fulfill e-commerce orders across the region.

Additionally, Mercado Libre has become an ecosystem for the Latin American consumer. The company has an e-commerce marketplace, of course, but also a complete logistics business, a digital wallet and a payment department, and also works as a lender.

MercadoLibre has maintained strong growth since the pandemic. Net income grew 67 percent year-over-year in the first quarter of 2022 and has seen an average annual growth of 53 percent over the past five years.

Latin America is a market whose economy lags behind that of countries such as the US, but is growing rapidly. According to Statista, e-commerce sales in the region were $85 billion in 2020 and could double to $165 billion by 2025, meaning Mercado Libre’s strong growth could continue for several years.

The ongoing bear market did not save MercadoLibre; The stock has fallen nearly 60% from its peak. Good news? The share price has become a deal worth considering. The price-to-sales ratio is now just 5, the lowest in more than five years.

A split could boost this company’s impressive stock and dividend yield.

It will be healing. (Broadcom). Perhaps no technology stock has produced more high-profile distractions than Broadcom. Its current 3.2% cash yield at $16.40 per share makes it a high-tech hobby hobbyist stock. In addition, the increase in payouts has been so dramatic that those who bought and held in 2009 may earn more than their original investment each year in dividends alone.

Additionally, this segment has contributed significantly to its long-term growth. Even after falling 25% from its 52-week high, the stock is trading above $530 per share. And given the business, investors should expect it to rise from time to time.

The largest organization is the Semiconductor Solutions division. Although it gets indirect consumer exposure, it collaborates with large customers to develop unique chips that meet customer needs. The Broadcom chip supports Personal Hotspot on late models. Apple (A.P.L 3.28%) For example iPhones.

Broadcom derives revenue from its infrastructure software segment. Provides management and security related software to other businesses. Assuming that Broadcom successfully closes the upcoming merger, this segment will receive a significant boost VMware (VMW -0.14%). This acquisition will enhance Broadcom’s hybrid cloud and digital workplace capabilities and lead to the rebranding of Broadcom’s software division under the VMware name.

And it continues to grow. For the first two quarters of fiscal 2022 (ended May 1), Broadcom reported revenue of $15.8 billion, up 19 percent from the same period in fiscal 2021. Thanks to lower revenue and operating expenses, first-half net income rose to $4.9 billion, up 81 percent from the first two quarters of 2021.

Considering the price-to-earnings ratio of 26, such growth makes it even more compelling. That’s close to its lowest in three years and will help boost the stock’s appeal as the market recovers. And with dividend starts at low prices, many investors can benefit from fast-growing dividends and further increases.