Will Beyond Meat Stock Split?

Beyond Meat Inc (NASDAQ:BYND) created the world’s first plant-based hamburger, the Beyond Burger, in 2015. Since then, it expanded into plant-based sausage while working on other meats. Soon, Beyond Meat was found in places like Whole Foods, Dunkin’ Donuts (DNKN), Subway, and Denny’s.

As the company continues to grow in popularity and revenue, investors wonder when will Beyond Meat stock split?

While Beyond Meat gained a lot over the years, it also gained a competitor in the form of Impossible Foods. This privately owned company launched its own plant-based meats while landing lucrative contracts like Burger King’s Impossible Whopper.

Let’s chew the facts of one of PETA’s favorite companies to see if it’s appetizing to customers in its current serving size.

Will Beyond Meat Stock Split?

A stock split doesn’t fundamentally change a company’s value. During a split, the company issues more shares to current shareholders. This move also devalues the shares by the same amount.

For example, in a 10-for-1 stock split an investor is issued 10 shares of the new stock for every one share owned of the old one. In return, each share is worth only one-tenth of the original share’s value. This way, the market capitalization stays the same.

And a 10-for-1 split is exactly what Beyond Burger may consider doing as its market cap approaches $10 billion. There are several reasons for this, with the first being that it’s a more affordable-looking share price for retail investors.

One of the biggest concerns for investors is finding companies that are not trading at inflated share prices. By lowering its stock price, Beyond meat could dodge the bullet -at least with newbie investors – of being perceived as overweight. For comparison, Tyson Foods, Inc. (NYSE:TSN) trades for half the price, even though it has over twice the market cap.

Pricing BYND stock under $100 per share would be a start, while a price of $15 per share would make it even more digestible. Even though it’s been around for over a decade, many people are still new to plant-based burgers.

According to a January 2020 Gallup poll, only 40 percent of Americans personally tried any plant-based meat. And now that the market is proven, food giants like Kellogg (K), Hormel Foods (HRL), Nestle, and Kroger (KR) are looking for a cut.

Beyond Meat Stock Split History

Beyond Meat’s IPO was held May 2, 2019, and the stock sold for $25 per share. Since then, its price ranged from a low of $48.18 during the coronavirus crash to a high of $234.90 in late July 2019. The company’s young age in the commodities-based food industry makes for a volatile stock price.

Splitting the stock could stabilize pricing more, as trading slowed during in 2020. Average trading volume of BYND is over 4 million shares per day. More stock at a lower price could make it easier to onboard new investors.

So far no BYND stock split history exists as the share price has never historically split.

Lower BYND share prices would coincide with the company lowering its production costs and price per pound. One pound of Beyond Burger costs $5.33, versus $4.89 for a pound of ground beef. It’s also expanding into international markets like China that will bring in more revenue.

Meanwhile, its Beyond Meatballs were picked up in Costco (COST), Beyond Breakfast Sausage can be found in some fast-food restaurants. It’s also expanding its meat offerings by testing chicken and seafood among others. But it still has competition.

BYND Stock Split Risks

Impossible Foods launched in 2011 and wasn’t far behind Beyond in creating a plant-based burger. After a successful 2018 CES launch, the company partnered with Burger King for the Impossible Whopper. The marketing blitz triggered a rush to pick up plant-based menu items.

Both companies pushed into grocery stores and opened a second revenue stream. However, they also gained the attention of traditional meatpackers who noticed stale meat sales. It wasn’t long before these companies invested into their own plant-based meats.

Although Beyond Meat holds a patent for plant-based meat structured protein, it could (and already has) be bypassed by changing the formula enough. This means the company is fighting for shelf and menu space with legacy conglomerates who have deep pockets and can grind them like their own products.

Splitting the stock could also make it look like a less hearty investment for those not constantly following market news. Of course, Beyond Meat could also rise.

Will Beyond Meat Stock Rise?

Beyond Meat isn’t targeting vegetarians nor vegan consumers. These niches are simply too small to make much of a profit. Instead, they’re working to convince everyone to eat less meat.

The coronavirus pandemic wreaked havoc on the global food supply chain. The USDA reported a meat shortage in April that dragged through the summer and into winter, with higher prices across the board.

As meat prices go up and Beyond Meat prices go down, more consumers are likely to make the switch. This is especially true if the price finally falls below natural meat. That could cause a big increase in the company’s stock price.

And groceries/food mostly performed well during the pandemic. Even the restaurant industry adapted with curbside pickup and no-contact deliveries. Both Beyond and Impossible could be set for further gains in the coming years.

The one problem for investors on the hunt for income is the company doesn’t pay dividends.

Will Beyond Meat Pay Dividends?

Beyond Meat could also benefit from a stock split to show an impressive dividend yield. Currently, the company doesn’t pay a dividend. For now the company is reinvesting heavily into research and development, as well as marketing so it makes less sense to pay dividends now than it does for a more established company.

The opportunity cost of paying dividends is too high for BYND because it generates a higher ROI by reinvesting its earnings in future growth.

A dividend payout is something to consider as the company enters a maturity phase but that’s a long way off now.

It has a strong brand presence with an essential product. If Beyond Meat can make the right moves and partnerships next year, it could be poised to grow beyond meat manufacturers like Tyson.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.