There are thousands of stocks in the US to choose from at various price points. Some go for as little as a few cents, while others cost hundreds of thousands of dollars. In this post, we’ll look at the most expensive stocks in the US based on their last closing price.
Also read: Do companies even care about their stock prices?
We’ll also talk about what each company does, what its market cap is, what stock splits are, and whether or not a company’s stock price even matters. Let’s dive in.
The 5 most expensive stocks in the US:
1. Berkshire Hathaway
- Stock price: $505,440
- Market cap: $742.76B
- Symbol: BRK.A
- Headquarters: Omaha, Nebraska
This is by far the most expensive stock in the US, coming in at around half a million per share. It has proven to be a great investment so far, with its value rising by around 100% in the last five years alone.
The company owes a lot of its success to its CEO, Warren Buffett, who is arguably the best investor of all time. He is also one of the richest people in the world thanks to all the great investments he has made. Berkshire Hathaway fully owns big and reputable companies like Geico, Duracell, Dairy Queen, and Fruit of the Loom, to name a few. It also has stakes in Apple, The Coca-Cola Company, American Express, Bank of America, and many others.
2. NVR
- Stock price: $4,282.88
- Market cap: $14.39B
- Symbol: NVR
- Headquarters: Reston, Virginia
This is the second smallest company on this list by market cap, but it has proven to be a great investment. The stock’s value has increased by a little less than 100% over the last five years, which is a fantastic return.
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NVR does business in two segments. There’s the home-building unit that builds and sells homes under three different brands — Ryan Homes, NVHomes and Heartland Homes. And then there’s the mortgage banking unit, the sole focus of which is to serve the needs of NVR home buyers. The company does business in 15 states, primarily on the east coast.
3. Seaboard
- Stock price: $4,227.94
- Market cap: $4.90B
- Symbol: SEB
- Headquarters: Merriam, Kansas
The company with the third most expensive stock in the US is Seaboard. It’s by far the smallest company on this list in terms of market cap and the least attractive investment based on a 5-year return, as its stock went up by only around 6% in that time.
Seaboard has a long history — it was founded way back in 1918. It’s in the agriculture and shipping business, where it’s focused on pork production and ocean transportation, among other things. It employs over 11,000 people and does business globally.
4. Amazon
- Stock price: $2,887
- Market cap: $1.46T
- Symbol: AMZN
- Headquarters: Seattle, Washington
Who doesn’t know Amazon. Founded by Jeff Bezos, Amazon is the biggest online retailer, selling just about everything you can imagine. It has proven to be a great investment, with Amazon’s stock giving investors a roughly 210% return over the last five years.
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However, Amazon won’t stay on this list for long. Back in March, the company announced its plans for a 20-for-1 stock split, which will happen on June 3rd. This means that the stock will be 20 times cheaper than it is now, which is something you can read more about in the section titled “What are stock splits?” below.
5. Alphabet
- Stock price: $2,392.28
- Market cap: $1.58T
- Symbol: GOOG
- Headquarters: Mountain View, California
Although it comes last on our list of the most expensive stocks in the US, Alphabet is actually the biggest company in terms of market cap. Its stock price increased by around 145% over the last five years, making it a great investment.
Alphabet, the company behind Google, does business in various sectors and is constantly expanding. Its primary source of revenue is advertising, but the company is also in the cloud business and even has its own lineup of hardware products under the Pixel, Nest and other brands. Like Amazon, Google is also in the process of a 20-for-1 stock split, which will take place on July 15.
What does the price of a stock tell us?
Not as much as a lot of people think. The price of a stock doesn’t tell you the value of a company. This means that a company with a stock price of $10,000 isn’t more valuable than a company whose stock price is $100.
What matters more is market capitalization, or market cap for short. You can calculate it by multiplying the stock price by the number of stocks outstanding a company has.
Let’s try to simplify it with a very basic example. Company A has a stock price of $200 and has 1,000 shares outstanding, while company B’s stock price is much higher at $1,000, but it only has 100 stocks outstanding. If you crunch the numbers, you’ll see that company A has a higher value than company B despite having a much cheaper stock. Company A’s market cap is $200,000, while the market cap of company B is $100,000.
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You can come to the same conclusion if you compare a company like Google to Berkshire Hathaway, both of which are listed above. Even though Google’s stock costs around $2,400 and Berkshire Hatchway’s comes in at around half a million, Google is still a more valuable company by market cap ($1.58T vs. $742.7B).
And why does market cap matter? It’s because market cap is what investors can use to figure out whether or not a certain stock is under- or over-priced, which is a topic we’ll cover in more detail in an upcoming article.
But, who can even buy a $500K share?
The more expensive a stock, the harder it is to buy, right? Well, not exactly. If that were completely true, companies like Berkshire Hathaway would have difficulty finding new investors.
You have the option of buying fractional shares.
More or less every broker out there offers the option of buying fractional shares. This means that investors can buy just a tiny portion of a share instead of the whole thing. Interactive Brokers, for example, lets you invest as little as $1 into any company, including Berkshire Hathaway.
So if you have limited funds available to invest, don’t just look at stocks that are in your price range. Look at the companies you’d like to invest in, and if their stocks are expensive, just buy a fraction of them.
What are stock splits?
Despite having the option of buying fractional shares, many companies prefer to keep their stock prices low enough so that most investors can afford them. After all, not everyone knows that fractional trading exists.
To keep stock prices at a reasonable level, some companies decide to do stock splits. For example, Amazon’s price is currently around $2,900, which is quite high, so the company decided on a 20-for-1 stock split, which will happen July 3rd.
This means that the company’s stock will become 20 times cheaper (example: $2900/20=$145), bringing the price down to a more reasonable level. While the price will go down by 20-fold, the number of shares will go up by 20-fold, meaning that the most important metric, which is the market cap, will remain the same.
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A lot of companies have used stock splits in the past, including Apple and Nvidia. Surprisingly, Berkshire Hathaway hasn’t gone down that road yet, but you never know what the future might bring.
