Top 10 Most Expensive Stocks: What Is the Highest Priced Stock Right Now?
Expensive is a relative term when discussing the stock market. Many investors measure a share’s cost by the stock’s price relative to its earnings or sales.
However, some become drawn to a company’s shares merely because of the quoted price. One stock has become so expensive that a single share is worth more than a house in many parts of the country. Although it might be hard to comprehend how a piece of paper could carry such value, a stock’s price may not represent the value of a company as well as some might assume.
What Is the Highest Stock Price Right Now?
As noted, investors can determine the highest priced stock in multiple ways. For this article, GOBankingRates defined “expensive” by the quoted stock price.
The most expensive stock in terms of the stock price is an A share of Berkshire Hathaway (NYSE: BRK.A). This stock closed at $425,260 per share on Nov. 30. Warren Buffett, the company’s longtime owner, is the one who helped take these shares to such heights.
About Berkshire Hathaway
Berkshire Hathaway is involved in a number of different business activities, with subsidiaries operating in industries ranging from insurance to real estate, energy and utilities, rail freight, food service and consumer products like jewelry, furniture and housewares. Some of its well-known brands include Geico, Dairy Queen, Oriental Trading Company, Duracell and Fruit of the Loom.
Despite the popularity of the brands Berkshire Hathaway owns, many know it best for its stock holdings. In fact, investors wait for Buffett to release his annual letter to shareholders each year, in part because the letters list Berkshire Hathaway’s holdings. These consist of a portfolio of well-known companies, with Apple constituting its largest holding in terms of market value, and Bank of America topping the list in terms of number of shares owned.
Berkshire Hathaway Stock
Berkshire Hathaway stock has reached its price for two primary reasons. One is earnings growth. Stocks tend to trade at a multiple of their earnings. Over time, Berkshire has experienced massive growth.
In 1965, the company reported gains of just under $4.85 million. By 2019, the most recent year with revenue unaffected by the pandemic, the company reported net earnings of more than $81.4 billion, or $49,828 per share. This means that profits increased almost 17,000-fold between 1965 and 2019. With diluted earnings per share reaching $26,667 for 2020, the company seems poised to push profits even further this year.
The second reason is Buffett’s aversion to stock splits. As the term implies, a stock split divides the shares into multiple pieces. Say, for example, you own 100 shares of Company X at $100 per share. If that company instituted a four-for-one stock split, shares would separate into four equal parts. This would give you 400 shares of Company X at $25 per share.
Berkshire’s A shares have never split. However, to attract small investors, the company introduced B shares (NYSE: BRK.B). Today, a B share is about 1/1,500 the size of an A share. At its most recent closing price of $278.43 per share, smaller shareholders often invest in the company through these B shares.
What Are the Top 10 Most Expensive Stocks Right Now?
Berkshire Hathaway is far from the only stock that has risen to a high share price. These are the most expensive stock shares as measured by the price per share as of Nov. 30, rounded to the nearest dollar.
1. Berkshire Hathaway (A Shares) (BRK.A)
Price: $425,260 per share
Market Capitalization: $631.37 billion
Net Income (2020): $42.521 billion
Services Provided: Insurer, holding company
Competitors and Similar Companies: Allstate, Progressive
2. NVR Inc. (NVR)
Price: $5,225 per share
Market Capitalization: $18.586 billion
Net Income (2020): $901.25 million
Services Provided: Homebuilding, mortgage banking
Competitors and Similar Companies: D.R. Horton, Lennar
3. Seaboard Corp. (SEB)
Price: $3,890 per share
Market Capitalization: $4.513 billion
Net Income (2020): $283 million
Services Provided: Food, shipping, commodity trading
Competitors and Similar Companies: Bunge, Tassal Group
4. Amazon.com (AMZN)
Price: $3,507 per share
Market Capitalization: $1.766 trillion
Net Income (2020): $21.33 billion
Services Provided: E-commerce, cloud computing
Competitors and Similar Companies: Walmart, Alibaba
5. Alphabet Inc. (C Shares), Formerly Google Inc. (GOOG)
Price: $2,849 per share
Market Capitalization: $1.912 trillion
Net Income (2020): $40.27 billion
Services Provided: Search, advertising, social media platforms
Competitors and Similar Companies: Microsoft, Baidu
6. Alphabet Inc. (A Shares), Formerly Google Inc. (GOOGL)
Price: $2,838 per share
Market Capitalization: $1.912 trillion
Net Income (2020): $40.27 billion
Services Provided: Search, advertising, social media platforms
Competitors and Similar Companies: Microsoft, Baidu
7. Booking Holdings Inc., Formerly Priceline (BKNG)
Price: $2,102 per share
Market Capitalization: $86.593 billion
Net Income (2020): $59 million
Services Provided: Online travel services
Competitors and Similar Companies: Expedia, Tripadvisor
8. AutoZone Inc. (AZO)
Price: $1,817 per share
Market Capitalization: $38.57 billion
Net Income (2020): $1.733 billion
Services Provided: Specialty retail
Competitors and Similar Companies: O’Reilly Automotive Inc., Advance Auto Parts Inc.
9. Cable One Inc. (CABO)
Price: $1,772 per share
Market Capitalization: $10.886 billion
Net Income (2020): $304.39 million
Services Provided: Broadband communications
Competitors and Similar Companies: WideOpenWest, Consolidated Communications Holding
10. Chipotle Mexican Grill Inc. (CMG)
Price: $1,643 per share
Market Capitalization: $45.98 billion
Net Income (2020): $355.77 million
Services Provided: Fast-casual dining
Competitors and Similar Companies: BJ’s Restaurants, Noodles & Co.
Investing In Expensive Stocks
At first glance, investing in expensive stocks might seem out of reach to the average investor.
Indeed, in previous decades, stocks might split to attract average investors. They might also split to earn a place or stay on the Dow Jones index. Because the Dow is price-weighted, shares with high prices can wield a disproportionate influence on the index, prompting the Dow to drop the company to keep the index in balance. Many believe that was one major factor in Apple’s 2020 four-for-one stock split.
B shares and stock splits aren’t your only option for owning shares in these ultraexpensive companies. Thanks to trading apps such as Robinhood, smaller investors can now buy fractional shares. Hence, splits may become more infrequent than in previous decades.
Moreover, investors tend to evaluate stock prices relative to earnings. Given this measure, investors might happily pay $425,260 per share when it produces over $56,270 per share — about 13% of the share price — in returns in a single year, as Berkshire Hathaway did between Dec. 2, 2020, and Dec. 1, 2021. Conversely, $1,643 per share for Chipotle may appear expensive in comparison, with its gain of $3.02 per share, amounting to about 1/5 of 1% of the share price, for the same period.
It’s important to remember that while a high share price might result from significant growth in the past, it’s not always a reliable indicator of a stock to buy for the future.
Daria Uhlig contributed to the reporting for this article.
Data is accurate as of Dec. 1, 2021, unless otherwise noted, and subject to change.
This article originally appeared on GOBankingRates.com: Top 10 Most Expensive Stocks: What Is the Highest Priced Stock Right Now?
