How To Buy Shell (SHEL) Stocks & Shares
Shell, the UK’s largest energy company, has recorded its highest-ever quarterly profit as the oil and gas group capitalised on soaring prices following Russia’s invasion of Ukraine.
Adjusted earnings for the FTSE 100 giant rose to £7.1 billion ($9.1 billion) in the first three months of this year, up from £2.5 billion ($3.2 billion) recorded over the same period in 2021, and well in excess of average analyst estimates of £6.7 billion ($8.7 billion).
Today’s figures are likely to prompt further calls from politicians and campaigners for a windfall tax on the UK’s energy companies to help households counter a cost-of-living crisis caused by soaring inflation, fuelled partly by runaway gas and electricity prices.
Earlier this week BP, another major UK energy company, reported its largest quarterly profit in nearly 15 years.
Shares in Shell rose by more than 3% in early trading today to around £22.90 as the company promised to return a higher share of cash flow to investors in the second half of 2022 on completion of the company’s planned £6.5 billion ($8.5 billion) share buyback.
Whether a windfall tax is introduced or not, Shell finds itself in a stronger financial position than it was in before the pandemic, with net debt down from nearly £62 billion ($80 billion) to less than £38 billion ($50 billion).
Ben van Beurden, Shell’s chief executive officer, said: “The war in Ukraine is first and foremost a human tragedy, but it has also caused significant disruption to global energy markets and has shown that secure, reliable and affordable energy simply cannot be taken for granted.”
Here’s what you need to know about buying and selling Shell shares.
Note: investing in shares comes with no guarantees. When buying company shares, it’s possible to lose some, or even all, of your money.
That said, over the long term – a minimum of five years (preferably longer) – it’s possible for share-based investments to produce superior returns to those available from low interest-paying deposit accounts, once inflation has been factored in.
It’s worth asking yourself why you want to buy shares. Are you looking for capital growth, income from dividends or a combination of both? Your investment objectives will determine what type of shares you invest in, whether high-growth technology shares or more defensive companies with a reliable dividend stream.
Most investors look for sound fundamentals, including a track record of consistent earnings growth, a strong market position or products and services with future growth potential. These should provide a solid platform for future share price growth.
That said, other factors such as takeover rumours can drive up a company’s share price. Investors may also be attracted by recovery plays, with a depressed share price providing the potential for a rebound.
Once you’ve decided which company to invest in, there are several steps to buying shares.
Whether you’re a seasoned trader, or new to stock market-based investments, you’ll need to open an account with a regulated brokerage to buy shares in Shell.
Stockbroking is a competitive market place and services for DIY investors come in a range of guises – from online investing platforms run by some of the biggest names in financial services, to investment trading apps that work off your smartphone or tablet.
Before opening an account, bear in mind the following:
• Keep your ultimate financial goals in mind
• Be prepared to ride out stock market ups and downs
• Aim to keep trading costs to a minimum
• Remember than share investing can prompt tax charges, for example, when selling part of your portfolio, unless you use a tax-efficient wrapper such as an Individual Savings Account (ISA).
Before buying any shares, it’s worth asking yourself these questions:
• Should I take financial advice?
• Am I comfortable with the level of risk in question?
• Do I understand the company in which I’m looking to invest?
• Am I protected if my platform provider/adviser goes out of business?
The ticker symbol for Shell is SHEL. It’s listed on the London Stock Exchange which is open for trading from 8am till 4.30pm. You should be able to buy Shell through the vast majority, if not all, brokerage accounts.
UK shares are subject to Capital Gains Tax unless they are held in an Individual Savings Account (ISA) or self-invested personal pension.
To find out more about Shell, visit the company’s online investor relations page.
It’s also worth comparing Shell’s valuation to other comparable energy companies. One way of doing this is to look at their relative price-earnings ratios (or P/Es) – shares trading on a high P/E have high expectations of substantial future growth.
Another useful research tool is brokers’ 12-month share price forecasts which can be found on financial websites.
People tend to invest in one of two ways: either with a lump sum purchase, or via smaller, steadier amounts over time.
The latter method benefits from a process known as ‘pound cost averaging’, a stock market technique which helps you pay less per share on average over time in falling stock markets. Rather than waiting to build up a lump sum, it also means an investor’s money can be put to use in the market straightaway.
Note that drip-feeding an investment may sacrifice capital growth if the share price is rising and you will also pay more in share-trading fees.
Once you’re ready to buy Shell shares, log in to your investing account or trading app. Type in the SHEL ticker along with the number of shares you want to buy or the amount of money you’re looking to invest.
Many brokers allow you to add a ‘stop loss’ once you have bought the shares, which allows you to limit your losses should a share price fall.
Whether your share portfolio is crammed full of companies or holds only a handful of stocks, it’s vital that you review how each component is performing on a regular basis: monthly, quarterly, or annually.
Doing this gives you the opportunity to review performance and consider whether any adjustments to your holdings are required – to maintain the status quo, buy more stock, or sell existing shares.
At some point, you will want to sell your holdings. To do this, log in to your investing platform, type in the SHEL ticker and select the number of shares you want to sell.
Note that if you’ve made a substantial profit, you may be liable for CGT. The CGT tax-free allowance for the tax year 2022-23 is £12,300. Find out more here about CGT rates and allowances.
How to invest in Shell via a fund
Investing directly in individual stocks can be an absorbing and, hopefully, profitable experience. It may also qualify you for shareholder perks specific to the company in question.
Investing directly in companies can, however, leave you vulnerable to stock market volatility and unforeseen swings in share prices.
That’s why financial experts recommend that most people invest in a diversified mix of asset classes and funds that hold a ready-made portfolio of upwards of 50 different company shares.
Being a large global corporation as well as being a major component of the FTSE 100, Shell is found in many global, UK equity and index tracker funds.