Over time a stock’s price can run up into the hundreds of dollars if things are going well. Many companies opt to enact a stock split that reduces the share price and makes it more accessible to retail investors. Other companies prefer to leave their share price high often to induce the perception of a premium investment.
This second scenario can deter some investors from buying a stock that has a high price tag. But these stocks shouldn’t be dismissed. Sometimes buying even a few shares of a high-priced stock can lead to better returns than buying a lot of shares of low-priced stocks just because it feels good to have more shares.
Let’s take a look at a few examples of stocks that come with hefty share prices but are still well worth the investment.
What Makes Parker-Hannifin a Good Stock?
Parker-Hannifin (NYSE:PH) is an S&P 500 industrial company that sells motion and control systems to a range of aerospace and commercial customers. The products are used to control the flow of gas and liquids in various hydraulic equipment and vehicles.
Parker-Hannifin is trading around $270 per share and hasn’t issued a stock split since a 3-for-2 split in October 2007. What makes it a buy at this level?
For starters, Parker-Hannifin has one of the strongest balance sheets in the industrial sector. This has allowed it to weather the recent economic storm and will enable it to capitalize on growth opportunities as the global economy improves. Operating from a position of financial strength has also supported the company’s decorated dividend hike history.
Investing in Parker-Hannifin is akin to investing in a rebound in the industrial economy. Like Caterpillar, the stock is commonly viewed as a bellwether of global industrial activity because its end markets include virtually every corner of the industrial sector from aerospace and automobiles to construction and refrigeration. As a provider of technologies that are always in demand, Parker-Hannifin is an indirect way to play a recovery in transportation, construction, energy, and agriculture all in one stock.
Why is Allegany Stock Worth the Price?
Alleghany Corporation (NYSE:Y) has a share price that is well above $500, but is worth every penny. The New-York-based property and casualty (P&C) insurance company generates most of its revenue from reinsurance policy premiums through its key TransRe subsidiary.
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