I do realize that I am a fairly new MGEE holder, been dripping almost three years, great stock and dividend. With only 20 mln shares, 34 % which is held by institutions, could Madison Gas support the extra shares in a 3 for 2 split? There were 2 splits in the early nineties and now MGEE is approaching an all tim high. I would not want a split if the impact were negative, or am I just blowing smoke?
Why worry about a split? Worry about inflation from all the money they're printing to fuel the economy and the return of high interest rates. It won't be an issue tomorrow, but it's coming. Two years, five years, who knows but it's coming. Dividend stocks like MGEE will take a price hit as money floods to TIPS, commodities and commodity stocks like gold mines and oil/gas producers. The current high price is money chasing yield in this low interest rate environment.
I expect to see a split possibly by the end of this year. It won't really make any difference, the shares will be worth the same but may make it seem cheaper for others to buy in. I've held MGEE in DRIP plan since 1989. This has been a wonderful company and great for my retirement! BUY ! BUY ! BUY! :)
The stock market is being artificially inflated preceding the elections. Afterward, this could easily retrace to 30-32. Although with the massive currency printing and devaluation of the dollar in 2011, it could again pop back over 40.
Other than increasing your # of shares-- what would be the point? The dividend percentage would remain the same.
I have been in the DRIP for 10 years now. The only problem I see with the price being where it is now is I doubt it will go up much more past 38 bucks without the dividend going up first to support the price.
A split might help with the swings in price. Earlier this year, this stock was a great buy under $30 - why it dropped that much? I'm not sure, but it was a great buying opportunity. But would kind of suck if you had to sell the stock at that time. Now it's still not a bad buy for long term holding, but with the low float, we could see the low 30's again for no real apparent reason.
If the stock split, it would increase the liquidity of the stock which would probably help keeping this stock from large swings in the stock price. I am sure there are probably other reasons for a stock split, but I would think this would best reason for a split.