The drug manufacturer Ely Lilly (NYSE: LLY) has had a very successful run in the long run. The shares currently trade around $818 and are up 20,030% over the past 40 years. The stock has also performed well this year, up about 36% (as of Nov. 14), ahead of the broader market.
Considering that Eli Lilly has been publicly traded for about seventy years, it’s no surprise that it has conducted a number of stock splits. When a company splits, the amount of equity does not change, but the number of shares does. Companies typically conduct stock splits to make their shares more attractive to the general public.
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If you bought one share of Eli Lilly 40 years ago, in 1984, here’s how many shares you would own today.
In the past forty years, Eli Lilly has completed four stock splits. The stock splits took place on the following dates:
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January 29, 1986 (2 for 1)
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April 28, 1989 (2 for 1)
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December 20, 1995 (2 for 1)
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October 15, 1997 (2 for 1)
In a two-for-one split, investors receive two shares for each share they own. After the first stock split in 1986, all investors with one share would therefore have two shares. They would then have four shares after the second stock split, eight shares after the third, and sixteen shares after the most recent split in 1997.
Lilly currently trades at over 61 times forward earnings, certainly not cheap, but not as high as the shares traded earlier this year. It will always be a crucial company to the US economy and people, so long-term investors can continue to hold the stock. But like many stocks in today’s highly valued market, it can be prone to pullbacks.
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