British Telecom (BT) is a major telecommunications company that has vested interests in several sectors. This covers fixed-line telephones, internet services, and TV subscription. The firm is listed on the London Stock Exchange, and it has historically paid dividends twice per year. However, BT has since suspended its dividend policy until 2021 as per the COV-19 pandemic.
In this guide, we show you how to buy BT shares online in the UK. We also walk you through the process of choosing a suitable broker, and give you some handy information on whether or not BT shares represent a viable investment.
As a leading FTSE 100 share, BT is listed on the London Stock Exchange with a market capitalization of just over £10 billion. As such, you will need to find a reliable online broker that gives you access to the UK stock markets. There are plenty of options in this respect, meaning that you should spend some time finding a platform that best meets your needs.
Below you will find a selection of stock brokers that allow you to buy BT shares online in the most convenient and cost-effective way.
If this is your first time investing in stocks and shares online, then you will want to use a broker that is suitable for newbies. eToro is excellent in this respect, as the platform allows you to buy shares with ease. All you need to do is register an account and deposit funds – and you can start investing straight away.
eToro offers an extensive stock library that consists of over 800 shares. This includes heaps of FTSE 100 stocks – including BT. Outside of the FTSE, eToro gives you access to 16 international exchanges. This covers markets in the US, France, Sweden, Canada, Saudi Arabia, Hong Kong, and more. Best of all – regardless of whether you are buying UK or international shares, eToro does not charge any commissions whatsoever.
If you are looking to place more sophisticated trades, eToro also offers BT stock CFDs. This means that you can trade BT shares with leverage of up to 1:5, and even short-sell the stocks. You can access all of eToro’s products via its desktop website or mobile investment app. The latter is available on iOS and Android devices. An additional eToro feature that is popular with first-timers is that of its Copy Trading tool. This allows you to choose a stock investor and mirror their portfolio like-for-like.
This is ideal if you want to invest in stocks but you have little to no experience. In terms of getting started, eToro requires a minimum deposit of $200 (about £160). You can fund your account instantly with a UK debit/credit card or e-wallet. Bank transfers are also supported. Once your account is funded, you can buy BT shares straight away. Your money is safe at all times at eToro, and the platform is licensed by the FCA. Your funds are also covered by the FSCS.
67% of retail investor accounts lose money when trading CFDs with this provider.
IG is a notable option for those of you that want access to a substantial stock library. This is because the platform hosts over 10,000 shares. In the UK, this covers both the London Stock Exchange and AIM. As such, you can buy BT shares at the click of a button. You can also buy shares in international firms. Much like eToro, this covers heaps of foreign marketplaces which is great for diversification purposes.
IG also offers a fully-fledged CFD stock trading and spread betting facility. This allows you to trade BT shares with leverage. For example, at 1:5 – a £300 account balance would allow you to enter a buy or sell position worth £1,500. When it comes to fees, IG charges £8 per trade when buying BT shares. If you are able to trade more than 3 times per month, this goes down to £3. CFD fees are slightly different, as you will pay a variable rate of 0.10% (minimum £10).
On top of its cost-effective pricing structure and huge stock library, IG is notable in the regulation department. This is because the platform holds multiple brokerage licenses, including that of the FCA. It was launched way back in 1974, and its parent company is listed on the London Stock Exchange. You can get started with a minimum deposit of £250. IG supports several payment methods, including debit/credit cards and a bank transfer.
So now that we have discussed some of the best UK brokers to buy BT shares with, the next step is to perform some in-depth research. After all, you need to have a birds-eye view of whether or not BT represents a good investment. This is especially the case during times of economic uncertainties as per COV-19, whether you’re investing in BT or other British companies like Tesco or Royal Mail.
BT is a UK-based telecommunication company that is active in over 180 nations. The firm was originally focused on fixed-line telecommunications, before diversifying into several new-age sectors. This now includes consumer and business internet services, mobile telecommunications, fibre broadband, and TV content.
BT was owned by the British public before its 1984 IPO. Its public listing on the London Stock Exchange subsequently priced BT shares at 130p each. This gave the company an initial valuation of £7.8 billion. Since then, it’s been somewhat of a rollercoaster ride for the telecommunications giant. For example, the shares went on an upward trajectory that lasted almost 15 years.
But, BT peaked in 1999 with a share price of just over 1,000p. Unfortunately for stockholders, BT shares are now worth just a fraction of their 1999 highs. At the time of writing in May 2021, the BT share price is just 170p. This gives BT a market capitalization of £16.9 billion.
BT shares started 2020 at 184p and the stock was looking to be in good shape until the COVID-19 pandemic hit. The shares hit a low of 94p and hovered around 100p through October. However, the shares have since recovered to 170p.
BT has historically been a good portfolio addition to those that seek regular dividend payments. However, the firm recently announced that it would be putting a stop to dividends until at least 2021. This is unwelcome news for investors and this has been reflected in the BT share price. With this in mind, your main focus will be on increasing the size of your investment through capital gains.
BT shares are worth just a fraction of their prior all-time highs. This doesn’t mean that the stocks aren’t worth considering. On the contrary, there is much to like about BT as an organization.
You should, however, explore both the good and bad points of a company before parting with your funds – so below you will find some useful information on where the shares are likely to go in both the short and long run.
Current Prices Offer a Bargain Purchase
At a current price level of just above 170p, BT shares are relatively cheap. As we covered earlier, the shares were priced at over 184p before the coronavirus-related market sell-off that occurred in March. While the 8% difference might seem relatively small, that’s a nice profit for investors if BT can close that gap. Looking at BT’s wider business successes, a price target of 200p is potentially in sight in the medium-term.
COVID-19 Restrictions Beyond the Control of BT
It is important to understand why the markets reacted the way they did with BT shares. First and foremost, BT engineers that were tasked with visiting consumer households to install its broadbands services were unable to once the lockdown restrictions came to place.
Then, its other core division – BT Sports, was also hit hard by the restrictions that forced the Premier League to shut its doors. This subsequently resulted in a loss of interest from consumers and thus – cancelled subscriptions. Both of these reasons are beyond the control of BT, which is why many would argue its shares are undervalued at the 100p-mark.
As the pandemic comes to an end in the UK, these issues will no longer hurt BT’s business. That goes a long way towards explaining the share price’s recent recovery, but investors appear to still be treading cautiously.
View BT as a Long-Term Buy and Hold
BT controls the lion’s share of the UK telecommunications space. So, an investment in BT shares should be viewed as a long-term buy and hold. The UK will always need telecommunications, and demand for broadband and broadcasting is only increasing. We think BT is poised to grow steadily for many years to come.
Although the future could be bright for BT shares, it is important to note that its stock price downfall started long before the COV-19 pandemic. For example, five years prior to writing this piece, BT shares were priced at 465p.
There are also concerns regarding BT’s mounting debt levels. In response to this, BT joined dozens of other FTSE 100 companies by announcing a dividend suspension earlier in the year. It went as far as saying that it does not expect dividends to return until at least 2021. The firm can, however, utilize the savings it makes by reducing its exposure to debt.
Step 3: Open an Account and Deposit Funds
If you have considered both the pros and cons of BT shares from an investment perspective and wish to continue with your purchase, we are now going to show you what you need to do.
First and foremost, you will need to open an account with your chosen broker. The sign up process remains largely the same across all platforms, albeit, we are going to show you how things work at eToro. After all, you can instantly buy BT shares without paying any commission.
Upon visiting the eToro homepage, elect to open an account.
The platform will need to collect some personal information from you, which will include your:
- Full name
- Date of birth
- Home address
- National insurance number
- Contact details
- Username and password
eToro will also ask you to supply some identification, not least because the broker is licensed by the FCA. This takes just minutes, and simply requires a copy of your:
- Passport or driver’s license
- And a recent utility bill or bank account statement
Then, you will be asked to deposit some funds. You will need to deposit at least $200 – which is about £160.
Supported payment methods at eToro include:
- Debit Card
- Credit Card
- UK Bank Transfer
All eToro deposits that are made in GBP will come with a 0.5% currency conversion fee. After that, you can buy shares in 17 different markets without needing to worry about fluctuating exchange rates.
Once you have funded your eToro account, you can then proceed to buy BT shares. All you need to do is enter ‘BT’ into the search box, and click on the corresponding result.
You will then need to click on the ‘Trade’ button, which will populate the order box for BT shares.
To complete your BT share purchase, enter the amount that you wish to invest. This needs to be in US dollars, and you’ll need to meet a $50 minimum.
Finally, click on the ‘Open Trade’ button to buy BT shares commission-free!
We believe that investors should buy BT and hold these shares for the long term. BT is the dominant company in the UK telecommunications sector, and that gives the company a huge amount of control.
In the near term, BT shares appear to be undervalued. The shares are priced 8% below where they were prior to the COVID-19 pandemic, despite the fact that all its operations are coming back online. BT could even see more profitability in the future as the shift to remote work encourages people to buy higher internet speeds.
In the medium term, expect BT to resume it’s dividend. Chances are good that it will continue to offer a yield around 9% since the company wants to reward shareholders who stuck with it through the pandemic. This should also boost the share price, which is a good thing for investors who get in today.
In the long term, BT has staying power. The company is essential to how the UK communicates and gets online. The critical nature of this telecommunications company means that it is here to stay – and that’s a good thing for investors.
BT has had a horrid time on the London Stock Exchange over the past couple of decades. In fact, you would need to go all the way back to 2009 to get to its prior all-time high stock price. Its share price decline was further amplified by the wider impact of the COV-19 restrictions.
With that said, some would argue that BT represents a bargain purchase at the 100p-level. After all, the firm still plays a dominate role in the UK fixed-line, mobile, internet and subscription TV markets.
If you do share this sentiment, you can buy BT shares at eToro without paying any commission. You can open an account in minutes and then instantly deposit funds with a UK debit/credit card or e-wallet.
Simply click the link below to get started!
67% of retail investor accounts lose money when trading CFDs with this provider.