World's Most Expensive Shares: Top Companies & Why Their Stocks Cost So Much

The stock price of a company is determined by the forces of supply and demand in the market. Some companies gain such dominance and position in their industries that investors eagerly bid up their share prices, valuing them at significantly massive levels. This article explores the world’s most expensive stocks, a focus on some exceptional companies whose share prices have reached dizzying heights.

Read on to understand which are the top companies, the factors that contributed to their steep valuation, and what makes theirs the most expensive stocks in the world.

1. Berkshire Hathaway

American conglomerate holding company Berkshire Hathaway, headed by legendary investor Warren Buffett, holds the undisputed title as the most expensive share in the world. With Class A shares selling for more than $400,000 per share, Berkshire's stock is in its own league, entirely overshadowing all other pricey stocks.

Several interconnected factors have led to the huge rise in Berkshire’s share price.

• Berkshire owns a wide range of successful operating businesses such as insurance companies, utility companies, manufacturing businesses and consumer brands. They produce consistent revenues and income.

• The company holds sizeable equity stakes in blue-chip giants like Apple, Bank of America and Coca-Cola, which deliver billions in dividends and appreciation.

• Warren Buffett's five-decade long track record of generating market-beating returns has made Berkshire stock synonymous with long-term investing success.

• With over $130 billion in cash reserves, Berkshire boasts an exceptionally strong balance sheet and high credit rating, providing financial flexibility.

• The limited supply and restricted float of Berkshire's Class A shares fan the flames for the scarce stock, with only around 640,000 shares available to the public.

• Buffett's longstanding opposition to stock splits or share buybacks has kept supply low and pricing ultra-high.

• Berkshire shares remain highly coveted among institutional and retail investors alike, buoying its lofty valuation.

2. NVR, Inc.

With a share price of over $9,700, NVR, Inc. has the second most expensive stock in the world. NVR is the parent company of home construction brands Ryan Homes, NVHomes and Heartland Homes. Key reasons why NVR’s stock trades at such lofty levels:

• NVR is the largest homebuilder in the U.S. and a leader in providing affordable luxury homes, giving it pricing power.

• The firm has an asset-light model of business, farming out construction but retaining land buying, design and sales. This, in turn, enhances margins.

• NVR stock has grown more than 18,000% over the last 30 years as the company has grown fast and been consistently profitable.

• Extremely prudent capital allocation and lack of debt provide financial stability. The company holds high cash balances for flexibility.

• NVR's paltry float with minimal shares outstanding concentrates ownership and fans scarcity value.

• Exposure to the resilient housing market and low-interest rates provide growth tailwinds.

3. Booking Holdings

With a stock price above $4,600, Booking Holdings operates the world's most popular travel fare aggregator website in Booking.com.

Factors driving Booking's premium valuation:

• Booking.com is the world's leading online accommodation platform, providing reservations for hotels, homes and other lodgings.

• Network effects from its global reach and inventory build a wide moat, with repeat customers and travel providers dependent on its platform.

• Booking has leveraged technology effectively to expand globally and build strong brand loyalty.

• With no need for significant assets like hotels or aircrafts, Booking is a high margin online intermediary.

• Cash pile of over $14 billion provides financial might to withstand industry downturns.

• It has consistently delivered over 20% revenue growth annually over the past decade.

4. Seaboard Corporation

Priced at more than $3,000 per share, diversified agribusiness conglomerate Seaboard Corporation is another high-priced stock.

What Makes Seaboard Stock So High-priced?

• Seaboard is a massive integrated pork producer, controlling every stage from farming to processing and marketing. It is a low-cost producer.

• The company operates an international shipping division that transports cargo across the globe through its fleet of ships.

• Majority family ownership by the Bresky family concentrates shares and reduces floating stock.

• Focus on niche food segments and essential transport services imparts stability to revenues.

• Strong balance sheet with prudent use of leverage provides staying power through all business environments.

5. Markel

Insurance holding group Markel enjoys a share price well above $1,600, placing it among the world's most rarefied stocks.

Reasons Markel Trades At Premium Valuation:

• Markel provides hard-to-place specialty insurance not covered by standard policies, giving it a profitable niche.

• By insuring some pretty unusual risks like summer camps, animal mortality and event cancellations, Markel reduces competition.

• Its insurance subsidiaries possess solid underwriting standards and disciplined risk selection.

• Markel's non-insurance ventures provide diversified revenue streams beyond just insurance.

• The firm acquires small insurers to integrate within its efficient operating structure.

• Markel's equity portfolio of stocks delivers high returns, supporting its insurance business.

Conclusion

The enormous prices commanded by stocks like Berkshire Hathaway, NVR, Booking Holdings and other elite companies reflect their towering business models, high growth markets, and premium brands. For discerning investors focused on quality, these expensive stocks in the world represent the pinnacle of stock investing. Their future upside potential makes the sky-high prices look reasonable for this crème de la crème of equities.