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How to Buy Pearson Shares UK – With No Commission

Many business changes have come into effect due to the Coronavirus pandemic, and one area that has benefitted dramatically has been the online learning industry. No company has fared better than Pearson – and with the outlook looking positive throughout 2021 and beyond, now could be a great time to consider adding this company to your portfolio.

In this guide, we discuss How to Buy Pearson Shares in the UK, exploring the company and its financials in detail and highlighting how you can buy Pearson shares – without paying a penny in commissions.

How to Buy Pearson Shares UK – Step by Step Guide 2021

If you’re looking for the quickest way to buy Pearson shares in the UK, then look no further. By following the four steps below, you can buy Pearson shares in under ten minutes with FCA-regulated broker eToro – without having to pay any commissions or transaction fees.

  • Step 1: Open an account with eToro – Head to eToro’s website and click ‘Join Now’ in the top right corner. Enter your email address and choose a username and password for your account.
  • Step 2: Upload ID – Verify your account by uploading proof of ID (copy of driver’s license or passport) and proof of address (copy of bank statement or utility bill).
  • Step 3: Deposit – Fund your account via credit/debit card, bank transfer, or e-wallet.
  • Step 4: Buy Pearson Shares – Search for ‘Pearson’ in the search bar, click on the first option, and click ‘Trade’ on the following screen. Enter your desired investment amount, choose whether you want a stop-loss or leverage, and click ‘Open Trade’.

Step 1: Choose a Stock Broker

One of the most important steps when you buy Pearson shares in the UK is to choose a reliable broker that can facilitate your investment. These days, there are many brokers available for you to choose from, all offering various fee structures and features to try and entice you to join.

However, this section will present the two best brokers in the UK for buying Pearson shares. In our experience, these brokers offer the safest and most cost-effective way to buy Pearson shares quickly.

1. eToro – Overall Best Broker to Buy Pearson Shares in the UK

etoro logo

The broker we recommend the highest when it comes to investing in Pearson is eToro. eToro is well known throughout the world thanks to its safety features and low-cost fee structure. In terms of the former, eToro is regulated by both the FCA and the FSCS in the UK – this means they must use the strictest security procedures to ensure users’ money is protected. eToro’s fee structure is one of their main benefits.

As they utilise a 0% commission structure, this means you will not have to pay any additional fees when you trade the stock market. This contrasts with many other brokers that can charge hefty commissions when you invest, which makes the whole process a lot more costly than it has to be. In addition to this lack of fees, eToro also allows you to buy shares from as little as $50, equating to around £35.

buy pearson shares etoro

67% of retail investor accounts lose money when trading CFDs with this provider. 

Aside from the fee structure, eToro also offers a whole host of useful features – most notably their CopyTrader feature. This revolutionary tool allows you to automatically copy the trades of other eToro users, many of whom are advanced, profitable traders. Through this tool, you can begin investing like a pro – even if you are a beginner trader.

etoro copytrader

Past performance is not an indication of future results

Finally, and importantly, eToro’s account opening process is speedy and can be completed in under ten minutes. All you need to hand in is some proof of ID and proof of address, and you’re good to go. Deposits are simple too and can be made via credit/debit card, bank transfer, or e-wallet. The great thing is all deposits are completely free to make.

Pros

  • Buy Pearson shares with 0% commissions
  • No stamp duty tax on UK shares
  • Over 2,400 global shares and 250 ETFs
  • No deposit or monthly account fees
  • Innovative CopyTrader feature
  • Regulated by the FCA
  • Covered under the FSCS

Cons

  • Small withdrawal and inactivity fees

67% of retail investor accounts lose money when trading CFDs with this provider. 

2. Capital.com – Trade Pearson Shares in the UK with Leverage

new capital.com logo

Although eToro takes the top spot when it comes to our favourite brokers, we’d also recommend checking out Capital.com as an alternative. Capital.com is regulated by the FCA and CySEC and has offices in London, Cyprus, and Belarus. One of the main benefits of using Capital.com’s trading platform is the low fees when trading shares.

Capital.com mainly offers CFD trading options, which means that users can utilise leverage when trading. Leverage essentially allows you to increase your position size without depositing more money, as you are basically ‘borrowing’ from the broker. Capital.com offers up to 1:20 leverage on the stock CFDs – so if you invested £1000 in Pearson shares and used 20x leverage, your position size would equate to £20,000! Although this drastically increases potential profits, it can also increase potential losses, so trade with care.

buy pearson shares capital.com

Capital.com’s minimum deposit is only $20 (around £14), meaning you can start small and build your position size up over time. In terms of tradable assets, Capital.com offer over 3000 stocks to trade, alongside 142 currency pairs, 34 stock indices, and 87 ETFs. In addition, they even provide cryptocurrency trading options too!

Finally, Capital.com offers a wide variety of deposit methods to choose from, including credit/debit card, bank transfer, and various e-wallets. Their platform is straightforward to use and offers some additional charting features which can help you conduct technical analysis.

Pros:

  • Educational app for new traders
  • No commissions when investing in Pearson
  • Competitive spread structure
  • Up to 1:20 leverage offered when CFD trading
  • AI assistant identifies your weak points
  • Excellent charting and analysis interface
  • £20 minimum deposit


Cons:

  • Cannot build custom investment strategies
  • CFDs only

75.26% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider.

Research Pearson Shares

When looking at the best shares to buy, there are various areas to consider before investing. Elements such as the company's business model, historical share price, and other financial metrics are essential to analyse to make sure any prospective investment is effective.

In the sections below, we cover all of the key things you need to know before buying Pearson shares in the UK, allowing you to make an informed investment.

What is Pearson?

pearson logo

First things first – who are Pearson, and what do they do? Pearson PLC is a British-based publishing and education company that was founded way back in 1844. Initially, the company operated in the construction industry, but in the 1920's Pearson completely shifted its business model and began operating as a publisher. Over the years, Pearson's brand and business grew, and the company even purchased the Financial Times back in the 1950s and acquired a 50% stake in The Economist.

In the decades that followed, Pearson acquired and created various well-known brands such as Penguin Books, Dorling Kindersley, Rough Guides, Edexcel, and more. Then, beginning in 2011, Pearson began focusing more on the education side of things and launched Pearson College, which is a private academic degree provider based in the United Kingdom. This continued for a few years, and in 2015 the company announced it was entirely focusing on education and learning rather than publishing.

Fast forward to the present day, and Pearson currently provides education and learning courseware for people in school, higher education, and in professional areas. These materials include textbooks and digital technologies that both teachers and students can use. Currently, Pearson controls various prominent education brands such as BTEC, Bug Club, GradPoint, Schoolnet, and more.

pearson services

Pearson's services have become increasingly popular in recent years as online learning becomes more prevalent. According to data gathered from Growth Engineering, the online learning market is expected to be valued at over $370 billion by 2026 – representing a considerable increase from its $101 billion valuations in 2019. This shift towards digital learning has prompted more and more awareness of Pearson and its systems.

Pearson has a primary listing on the London Stock Exchange (LSE) under the ticker 'PSON' and is one of the companies that make up the FTSE 100 index. In addition, Pearson has a secondary listing on the New York Stock Exchange through American depositary receipts, which allows US residents to trade Pearson's shares. At present, Pearson has a market capitalisation of £6.37 billion. This market cap makes them the largest book publisher in the world.

Pearson Share Price

Now that you know who Pearson is, let's dive into their share price and financials. At the time of writing, the Pearson share price is sitting at 842.80p per share. This represents an increase of just over 22% since the turn of the year. Notably, the Pearson share price has actually increased over 87% since the same time last year – so if you’d invested £5000 back then, your investment would now be worth £9350!

When stock trading, it's always a good idea to look at a company's all-time high to get an idea of where price could potentially return to. In Pearson's case, the company's all-time high occurred in 2000 when the Pearson share price was trading at 2400p. The closest that price got to these levels was in 2015 when shares were trading at 1514p; however, apart from this, these heights have not been approached since.

According to data gathered from Hargreaves Lansdown, Pearson PLC generated revenues of £3.39 billion in 2020, a slight increase from the year previous. This equated to a net profit for 2020 of £310 million, which is £44 million more than 2019. These figures are impressive given the Coronavirus pandemic's impact and highlight how Pearson's services have remained in demand during the lockdown.

etoro pearson price chart

67% of retail investor accounts lose money when trading CFDs with this provider. 

It's also essential to look at some other metrics that can give an idea of how valuable Pearson's stock is. Two metrics we favour are earnings per share (EPS) and the price to earnings ratio (P/E). In terms of the former, this is calculated by taking the company’s profits and dividing them by the total number of shares outstanding. The resulting number gives an idea of how profitable a company is; the higher its EPS, the more valuable the stock.

In terms of Pearson, EPS for 2020 are stated as 41p. Comparing this to 2019’s EPS figures of 34p, you can see that the company has become more profitable (and therefore more valuable) over the past year. Notably, EPS for Pearson were much higher in 2018 at 75.60p – although it may seem like a negative that EPS is much lower these days, it does provide a target for Pearson to aim for.

The P/E ratio is also important to consider when you buy shares, as it provides an idea of how valuable a company is and whether it is undervalued or overvalued. P/E ratio figures are calculated by dividing the company's share price by its EPS estimate. In Pearson's case, their P/E ratio currently sits at 22.46 – the highest it has been in the past five years. This time last year, it was at 13.16, highlighting just how well the company has performed.

Pearson Shares Dividends

If you are someone who is interested in investing for income, then it might be worth checking out Pearson’s shares. When you buy Pearson shares in the UK, you will be provided with a dividend payment twice per financial year – an interim payment in September and a final payment in May. These combine to make your total dividend payout for each year.

pearson dividend structure

Looking at the specifics, Pearson paid an interim dividend payout of 6.00p per share in September 2020, with the final dividend payout of 13.50p per share being made at the start of May 2021. This resulted in a total dividend of 19.50p per share for investors, which is the same as the previous year. However, dividend yields have still grown substantially since 2018 and 2017, when they were 18.50p and 17.00p, respectively.

Are Pearson Shares a Good Buy?

Considering all of the information mentioned above, is it a good idea to buy Pearson shares in the UK? We feel the answer to that question is yes. Pearson has pivoted exceptionally well in recent years and is well-placed to benefit from changes in the way we receive education and learning materials.

Transition to Online Learning

As mentioned earlier in this guide, Pearson began focusing solely on education around six years ago, and it has definitely paid dividends. Pearson’s global online learning business reported sales growth in Q1 of 25%, with total revenues across the entire company rising by 5%. Furthermore, as schools and universities reopen, Pearson’s services are expected to be more in-demand, which can only be good news for the company’s bottom line.

These days, traditional textbooks and manuals are not as popular as they were ten years ago, which is good news for Pearson. In addition, exams are projected to return to a semblance of normality in the UK in the latter half of 2021, which will mean online learning services such as Pearson's will be attractive to students across the country. Finally, top analysts estimate a 47% earnings increase for Pearson in 2021, which would undoubtedly be a positive for the company's share price.

Dividends and Financials

Pearson can also be thought of as one of the best dividend stocks to buy, thanks to its reliable and growing dividend payouts. Owning shares in a company that pays a dividend is almost always a good thing, as you can benefit from a consistent passive income stream on top of the potential for capital growth. As noted, Pearson's dividend amounts have grown in recent years; and if analyst estimates of earnings turn out to be accurate, there's certainly a chance that yields could increase further later in the year.

are pearson shares a good buy

The graphs above also highlight Pearson's past performance from a financial perspective. P/E multiples have increased year-on-year, along with an increase in the company's price-to-sales ratio in 2021. Furthermore, the price-to-cash-flow estimate is also growing, which tends to signify that a company is increasing in value.

Taking everything into consideration, the decision to buy Pearson shares in the UK is probably more suitable for investors who are interested in long term investments. Unlike growth companies, Pearson is a well-established firm, which means that a huge increase in the Pearson share price in the short term is pretty unlikely. However, if you have some capital to invest and are looking for a company that pays a solid dividend and exhibits low volatility, whilst having a business model that is set to benefit from changes brought about by the pandemic lockdowns, then an investment in Pearson is undoubtedly worth adding to your watchlist.

Open an Account & Buy Shares

If you’re set on buying Pearson shares, then you’ll need to set up a broker account to facilitate your investment. In our experience, eToro is one of the best stock brokers available for stock trading. In this section, we'll show you how to get up and running with eToro and buy Pearson shares – all without paying any commissions.

Step 1: Open an eToro Account

Navigate to eToro's homepage and click the 'Join Now' button. You'll have to provide your email address and choose a username and password, but you can move onto the next step once this is completed. You can also sign up for eToro through their smartphone app.

etoro sign up

67% of retail investor accounts lose money when trading CFDs with this provider. 

Step 2: Verify your Account

Due to eToro's high level of security, you'll have to verify yourself before trading. To do so, all you have to do is upload proof of ID (a copy of your driver's license or passport) and proof of address (a copy of a bank statement or utility bill). eToro will then verify these documents, which usually takes a few minutes to complete.

Step 3: Make a Deposit

New users at eToro must make a minimum deposit of $200 – however, subsequent deposits only need to be a minimum of $50 (around £35). To make your deposit, you have the following options at your disposal:

  • Credit card
  • Debit card
  • Bank transfer
  • Neteller
  • PayPal
  • Skrill
  • Klarna
  • Trustly

Step 4: Search for Pearson Shares

Click into the search bar at the top of the screen and type in 'Pearson'. Click on the first option in the drop-down menu and click 'Trade' on the following screen.

invest in pearson etoro

Step 5: Buy Pearson Shares in the UK

To finalise your investment, simply enter the amount you'd like to invest – eToro requires a minimum investment of $50 when stock trading, equating to £35. After this, double-check everything is correct, and click 'Open Trade'.

buy pearson shares etoro

Congratulations! You’ve just bought Pearson shares with an FCA-regulated broker – without having to pay any commissions at all!

67% of retail investor accounts lose money when trading CFDs with this provider. 

Pearson Shares Buy or Sell?

Overall, can Pearson shares be considered a buy or a sell opportunity? In our opinion, we feel it is the latter. When equity trading, specific metrics such as the company's P/E ratio and its EPS estimate are important to look at – and in the case of Pearson, they certainly have solid figures which ensure a positive outlook for their stock.

In terms of their share price, the price chart showcases a solid bullish trend on important timeframes such as the daily and weekly timeframes. Although momentum is still relatively slow, this can actually represent reliable and consistent growth rather than anything negative. Furthermore, there are still the highs of 2019 that price could head towards; if this happens, it will represent a solid return from the levels that price is at currently.

pearson education platform

Another reason to invest in Pearson is as an alternative to an investment in income funds. Although these funds include various dividend-paying stocks or bonds, investing in Pearson ensures you get exposure to the specific companies you want. In addition, nothing is stopping you from creating your own portfolio of dividend-paying stocks with a reliable broker such as eToro, which can be tailored to your exact specifications.

Finally, Pearson's business model is perfect for the environment that we can expect to see going forward. Social distancing measures have meant that remote learning has become increasingly necessary, so Pearson is well-placed to provide this sort of service. If Pearson can continue growing their market share in emerging countries located in Asia and South America, it will mean great news for profits – and ultimately, their share price.

How to Buy Pearson Shares UK – Conclusion

The growth of online learning has been a real positive for Pearson - and with this trend expected to continue in the years ahead, it leads to a rosy outlook for the company and its stock price. With revenues and profits expected to grow annually, now could be a fantastic time to consider investing in Pearson stock and benefit from any future share price increases.

If you've made your mind up and wish to buy Pearson shares today, we'd recommend opening an account with eToro. With over 20 million users worldwide, eToro has a stellar reputation as one of the world's safest brokers and is regulated in the UK by the FCA and the FSCS. Furthermore, eToro also offers commission-free trading when buying Pearson shares, with investments permitted from as little as $50 (around $35).

eToro – Buy Pearson Shares With 0% Commission

etoro logo

67% of retail investor accounts lose money when trading CFDs with this provider. 

FAQs

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About Connor Brooke PRO INVESTOR

Connor is a Scottish financial expert, specialising in wealth management and equity investing. Based in Glasgow, Connor writes full-time for a wide selection of financial websites, whilst also providing startup consulting to small businesses. Holding a Bachelor’s degree in Finance, and a Master’s degree in Investment Fund Management, Connor has extensive knowledge in the investing space, and has also written two theses on mutual funds and the UK market.

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