BP shares nose-dived during the corona pandemic and it does make sense as travelling was banned worldwide. However, it does manage to stand again by increasing its share price but it still hasn’t reached its pre-pandemic level and it doesn’t seem to be the case for a period of time.
So, if you are wondering whether right now is a good time to buy BP shares, then you are at the right place, as in this article we will explain everything that you need to know to buy BP Shares in the UK.
In this article, we will give you detailed information on how you can buy BP shares, whether you should buy them or not and whether or not it is a good time to buy BP Shares. We will also tell you the best trading platforms that you can use to buy BP Shares by staying within your budget. So, without further ado let’s jump straight into our topic.
Buy BP Shares with these easy steps:
- Step 1. Look for the Best Trading Platforms that offers BP Shares at minimum fees.
- Step 2. Explore BP Shares
- Step 3. Open an account and deposit your funds.
- Step 4. Buy BP Shares.
BP shares overview
BP shares are among those few shares that have fallen to their knees during the corona pandemic. However, the situation of the company was not any better before Corona happened. Corona had caused its shares to go as low as 222p.
Launched in 1909 British Petroleum styled as BP is one of the best leading oil companies. With its headquarters in London, the company operates in 79 countries across Europe south and North America, Australia, Asia and Africa. The company is listed on the London Stock Exchange and has its presence on both the New York stock exchange as well as the Frankfurt stock exchange.
When talking about the fundamentals of the company, it was a roller coaster ride for the company. The infamous Deep Horizon oil spill of 2010 has hit the company so badly that it is yet to fully recover from its devastation as due to this the company had resulted in fines of $19 billion, which indeed like a huge sum and also the company’s share was declined by almost 50 per cent and that too only in two months.
Well, that was not the only bad phase the company had to face, the company has been hit badly by the devastating corona pandemic in 2020. As a result, it caused BP shares to go as low as 222p. Simply put, BP shares have been under-performing in recent years.
Things to consider before buying BP shares
Before you buy shares of any company, it is very crucial to do some background research and determine whether you should add that particular shares to your portfolio or not. When buying shares of any company there are a variety of things that you should consider such as how it has performed in the past, what are the future expectations, what have it paid to its shareholders and many more. Therefore it is very important to do your research before jumping straight to any decision. Below we have listed a few points that you should consider before buying BP Shares.
- The very first thing that you should consider is that BP is among those few companies that were hardest hit by the corona pandemic and caused its shares to decline to 180p. But, the thing here is that oil and gas are the de facto energy resources globally, which means, they eventually will recover to their pre-pandemic levels. And, once the travel restrictions are fully lifted, the shares will follow suit.
That simply means it is a great opportunity for you to buy BP shares at a discounted price.
- Another thing to consider here is that BP has freshened up its business model recently in 2020. This new model focuses on value investment and it invests in companies that develop new technology so that BP can benefit from global energy systems. As per this business model, the company tends to find and generate additional resources and renewable energy. Then it refines and manufactures and proceeds with the marketing of the petrochemical products. This new model also delivers products and services such as fuel and electric vehicle charging.
- When talking about the dividend policy of the industry it can be assumed that once the company will recover from its corona devastation, it will reinstate its overly generous dividend policy to its shareholders. BP at one point even outpaced the vast bulk of dividend-paying FTSE 100 companies as it was yielding 10.2% when it was at its peak.
- Another important thing to consider before buying BP shares is that OPEC (organization of the Petroleum exporting countries) is all determined to increase global oil prices. That caused the organization to have agreed to cut the oil production levels by 10 million barrels per day. As a result of this, BP had a break-even point of $35 to help OPEC proceed with its agreement.
Read Also: What is Oil Trading – Guide
Best Trading Platforms to Buy BP shares
There are thousands of trading platforms available in the market which you can access to buy BP shares. But not all the platforms that give you access to your desired shares are trustworthy. There are a few trading metrics that you should consider before selecting a trading platform. These metrics involve regulations, trading assets, fees and payments, withdrawals and deposits and many more.
Considering all these metrics in all the Platforms that are available in the market can be very hectic and time-consuming. Therefore, to save you time and energy below we have listed down a few trading platforms that can be trusted blindly.
eToro- Best Commission Free Trading Platform
The very first Platform that we have on our list is eToro. It is the world’s finest trading platform that offers a variety of financial assets for investment including, Cryptocurrencies, Commodities, Indices, and Shares. It offers 800+ Shares globally. This platform allows you to trade stocks that are listed on the London, New York and Tokyo exchanges.
This platform is a great choice for those who are looking to make a diversified portfolio.
When talking about shares it offers a variety of options, including BP shares. On this platform you are allowed to apply the leverage of up to 1:5 and even you can buy assets traditionally.
The platform is further regulated by the FCA, ASIC and CySEC. Even the platform is accessible to US traders as it is also registered with FINRA. Except you will be required to pay a 0.5% fee on all your deposits and $5 on every withdrawal. It is the cheapest brokerage platform in the UK.
For beginners, eToro provides the copy trading feature. This feature allows you to copy ongoing trades of expert traders. You can also use the copy portfolio feature, which allows you to diversify your investment portfolio. Unlike other platforms, account creation on this platform is not time-consuming. It takes only a few minutes to create an account on eToro. Once you are done with creating an account you are then required to fund it to start your trading journey.
For the convenience of its user’s, it accepts various payment methods for making a deposit such as Debit/Credit Card, Bank account, e-wallet e.t.c. The fee attached to the platform is an inactivity fee of $5, which is understandable and also the spreads are relatively low. The platform also offers a mobile application for the convenience of its customers. This trading platform also offers 24/7 available customer support which other free platforms don’t offer.
- Regulated by FCA, ASIC and CySEC
- Copy-trading and CopyPortfolio feature
- Offers a variety of financial assets
- Accepts debit/credit, bank account, e-wallet
- Fractional trading
- Offers 800+ shares
- Offers BP shares
- Not suitable for advanced learners
IG- Best platform for diversification
Another amazing platform that gives you access to BP Shares is IG and it also allows you to apply Leverage. That means you don’t have to worry about investing more even if you don’t have huge sums in your pocket. It is regulated by FCA, which means you don’t have to worry about the safety and security of your funds.
The platform gives you access to over 12,000 assets and allows you to apply the leverage of up to 1:200 on forex pairs like EUR/USD, EUR/GBP, EUR/GBP, EUR/JPY, and USD/JPY to trade Forex . That means with an account balance of just $300, you could potentially trade with $60,000. What attracts the traders most to this platform is that it gives access to over 80 currency pairs.
This trading platform is highly suitable for those who are looking forward to trading forex but don’t have enough money.
The account creation on this trading platform is also super easy. However, you do need to pay an entry-level fee of £8. But the good thing is that if you trade regularly then this entry-level fee will be reduced to £3. Once created an account you will be required to make a minimum deposit of $250 on this platform to initiate trading. This minimum deposit isn’t the fee of this platform but the working capital that is needed by the investors to start investing journey.
- Well reputed UK Broker
- Offers more than 12,000 traditional assets
- Offers leverage and short selling
- Offers spread betting and CFD products
- Offers educational tools
- Offers more than 80 pairs
- MT4 is supported
- Offers access to BP Shares
- $15 commission on US stocks
- $250 minimum deposit amount
Plus 500- Trade through CFDs
Another brokerage platform that we have on our list of best trading platforms is plus 500. This amazing Platform gives access to a variety of different financial assets through CFDs including BP Shares with a spread of 1.25 or 0.07 % and 0.5 minimum deposit.
On this platform, you will get access to the shares of nearly 500 companies. Moreover, it allows you to apply the leverage of up to 5:1 on BP shares. The platform is fully packed with advanced charting packages, an economic calendar, risk management tool and price alerts service.
The platform is regulated by the FCA.
Hence it makes sure that all of its traders’ funds are not compromised at all. Its parent company is listed on the London Stock Exchange. The account creation on this platform is not time-consuming. All you are required to do is to enter your few basic details, undergo a verification process, make a deposit and that’s all. To deposit on this platform you can either use debit/credit cards, bank transfers or PayPal.
- Regulated by the FCA
- Access to a wide range of investment assets
- Leverage of up to 5:1 for retail customers
- Easy and fast account creation
- Offers short selling
- Price alert feature
- Offers mobile application
- Offers BP shares
- CFDs only
- Not beginners-friendly
How to Buy BP Shares in the UK?
BP Shares can simply be bought in two ways, either by traditional method or by trading derivatives.
The traditional method involves share dealing. When buying through share dealing you will become a shareholder of the company by buying BP shares directly. Share dealing allows you to vote in the company’s meetings.
Whereas, when buying through trading derivatives such as CFD or spread betting you are required to speculate on the rising and falling market price of shares without getting any direct ownership of the company. If you predict the price will rise then that means you are going long, and if you predict the price will fall down then it means you are going short.
How to buy BP Shares through a Trading Platform?
So now that you have gained all the information on what are the best trading platforms to buy BP Shares, you would probably be wondering what is the procedure you need to follow on the trading platform to buy shares. Below is a step by step guide you need to follow to buy BP shares on our most favourite platform eToro.
If you are choosing some other platform then also this guide is helpful as the buying and account creating processes are almost the same on every platform. However, we do recommend the platform eToro, as it provides an awesome trading feature so that you can have a seamless trading experience.
Step1: Create an account
The very first step to buying BP shares is to create an account on the official website of eToro. To do so you are required to fill in a registration form by entering in your basic details such as your name, phone number, e-mail address, and setting a strong password. After entering all of your details make sure to accept terms and conditions.
eToro will ask you to verify your identity by uploading some of your documents, don’t worry as your documents are truly safe on this platform. However, you don’t need to undergo verification until you deposit more than $2,250 or you request a withdrawal.
Step 2: Fund your account
Now that you have successfully registered on this platform you are now all set to fund your account by making a minimum deposit of £160. This funding amount isn’t the fee of the robot but the working capital that is needed by the traders to execute trades. eToro offers several payment methods for the convenience of its traders, you can choose whatever method you feel more comfortable with. The payment methods supported by eToro are Debit/Credit Card, PayPal, Skrill, Nettler, and Bank Transfer.
Step 3: Make your purchase
Now that you have successfully registered and funded your trading account, you are now all set to buy BP Shares. To do so, all you are required to do is to enter ‘BP’ into the search engine at the top of the page and once entered click on the result that appears in front of you. Then click on the ‘Trade Button’, enter your desired amount and then click finally on ‘Open Trade’ to buy your BP Shares.
On this platform, you can buy or sell BP shares as long as your transaction involves a minimum of £40. You also have the privilege to apply Leverage and you can also set a stop loss or take profit level for your trade using the order form.
BP shares – Buy it or Sell it?
Whether you decide to buy or sell the shares, it becomes a necessity to ensure whether the company and the shares have the potential to perform well in the future. When talking about fundamentals, This company’s share has increased by 50% over the past 6 months. So, we think BP shares are worth buying. Before you proceed it is worth noting that this is a very high-risk investment. And, high-risk Investments are not for everyone as it involves risk at a higher level so it is better to handle it with care.
Bp shares at present are still trading 37% below the price they were trading at before the pandemic, which means it still will take more months to reach its pre Pandemic levels and thankfully the economic situation right now is in favouring BP shares.
However, it is vital to know that it is very unlikely for the oil companies to reach their pre-pandemic levels with the advancement in automated vehicles technology. So, if you invest today in BP then it is nearly impossible for the share prices to reach where they were before the pandemic but it is possible for the BP shares to reach a middle ground. And, BP is making moves much faster than other oil companies to reposition itself for the new needs of the world.
BP Shares- Analyze Fundamentally and Technically
Before you jump straight into buying BP shares you are first advised to analyse them Fundamentally and Technically.
To analyze the company and share fundamentally, you are required to evaluate its intrinsic value by considering the company’s overall economical, financial and management conditions.
To analyse the company and share technically you are required to consider the company’s past prices and volumes instead of considering its intrinsic value. Technical analysis is done to identify current and future trends and patterns in the company’s share.
If you decide to buy a share then you must also consider how many shares you should buy. To help you out on this matter many trading platforms offer their users a share calculator. By using it you can calculate how many shares you should buy, well if your chosen Platform doesn’t offer this feature then you can calculate it on your own by using the formula:
Total Amount Desired to Invest/Price Per Share
Below are the popular fundamental metrics that can be used to determine the value of BP Shares.
BP Shares EPS
EPS or earning per share tells how profitable BP can be. To calculate it all you need to do is to divide BP’s profit by the number of BP outstanding shares.
BP Shares P/E Ratio
P/E ratio or price to earnings ratio can be calculated by dividing BP’s share price by its earnings per share or EPS.
The P/E ratio tells you how much you need to spend on BP shares to make £1 in profit.
BP Shares ROE
ROE or Return on equity can be calculated by dividing BP’s overall income by shareholder equity. This metric compares BP’s income against its shareholder’s equity.
From all the depth in research we have concluded that at present BP shares are available at a discounted level, so that makes it a great opportunity for those who are willing to buy BP shares. Though it is unlikely for the company’s shares to reach any extreme levels, they sure will not fall to their knees this time. And, the future looks very challenging and full of hardships for the oil company with the shift in electric vehicles technology.
However, BP is all set to rock in the future with its new updated business model but it will take longer than usual. And, once the company is fully recovered from the pandemic, it will start to return double-digit dividends.
So now that you have made up your mind on buying BP shares, then do it right now with our most recommended trading platform, eToro.
- Is it a good time to buy BP shares?
Yes, it definitely is a good time to buy BP shares. The company is coping up with the hybrid world with its new business model. That means, ultimately the BP shares will shoot up to their pre-pandemic levels or may be much higher than that in the coming future.
That means, you never know when in a year or two or maybe more or less its share price will reach an unaffordable price, so right now is a great opportunity to buy BP shares at a discounted price.
- Which is the best trading platform to buy BP shares?
All the above-mentioned platforms are the best in the market. However, if we have to recommend one among all the above listed, we would recommend you to go with eToro. It is an ideal and most favourite trading platform of UK traders as it is regulated by the FCA, and offers you a variety of assets to make a diversified trading portfolio.
- What is the minimum amount of BP shares I can buy?
At the time of writing this article, BP Shares are priced at 353.55p per share, which is a discountable Price but it still doesn’t sound affordable to many traders. Therefore, thanks to the trading platforms such as eToro, which allows you fractional ownership that means instead of buying a whole you can buy a part of it. That means, on the trading platform you can buy a part of BP shares as low as $50.
- Does BP pay Dividends?
Yes, BP does pay dividends. It actually has a long-standing record of paying double-digit dividends. In 2019, it was yielding 10.2% outpacing the vast bulk of dividend-paying FTSE 100 companies.
- What stock exchange is BP listed on?
Bp is primarily listed on London Stock Exchange. It has secondary listings on the New York Stock Exchange and Frankfurt Stock Exchange.