Investors get excited about stock splits for two reasons. The most obvious reason is they reduce a company's share price, making the stock more accessible. The less obvious reason is they often spotlight strong businesses. To elaborate, forward stock splits are only necessary after substantial share price appreciation, which rarely happens to mediocre businesses.

(NASDAQ: MSFT) and ServiceNow (NYSE: NOW) are prime examples of that concept in action. Their stock prices have soared 264% and 216%, respectively, over the past five years. In both cases, that price appreciation can be traced back to strong financial results.

Those gains made Microsoft and ServiceNow stock split candidates in 2024, but these two companies are worthwhile investments whether or not they split their stocks. Here's why.

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Source Fool.com