How to Buy Sainsbury’s Shares UK – With 0% Commission

J Sainsbury plc, trading as Sainsbury’s, is a well-known supermarket chain in the UK and the second-largest food retailer in the nation with over 606 supermarkets and 820 convenience stores. With a market capitalization of £4.51bn, Sainsbury’s is also one of the most traded shares in the UK share market these days.

In this guide, we walk you through the process of how to buy Sainsbury’s shares online in the UK. We’ll also include an overview of the most trusted UK brokers to buy Sainsbury’s shares from, how the Covid-19 pandemic has affected the supermarket chain, its past performance and potential future profitability.

Step 1: Find a UK Stock Broker That Offers Sainsbury’s Shares

Sainsbury plc is listed on the London Stock Exchange (LSE) under the ticker symbol ‘SBRY’ and is part of the FTSE100 index. This means that most UK online stock brokers will allow you to buy shares of the supermarket chain. You do need, however, to make sure you get the best fees and commissions and that your chosen broker is regulated and can be trusted.

To help you find the right broker, below we suggest two of the most popular and well-known UK stockbrokers that offer you to buy Sainsbury’s shares.

1. Plus500 – Trade Sainsbury’s Share CFDs with Tight Spreads

Plus500 is very popular among day traders looking for a CFD trading platform with highly competitive spreads. This all-in-one trading platform allows investors to trade on more than 2000 financial instruments across various markets that include shares, ETFs, digital assets, currency pairs, indices, commodities, and options.

In the case of share CFDs, you can trade Sainsbury’s shares with a 5:1 leverage and a spread of 1.24. In terms of key features, Plus500 has an effective trader’s sentiment tool that collects traders’ opinions on any asset. Moreover, investors get real-time SMS, email, and push notification on a chosen asset based on price change, a change in asset percentage, or trader’s sentiment.

Overall, Plus500 offers a user-friendly stock trading platform that can be accessed via any web browser or on your mobile phone via the Plus trading app. If opting for Plus500, you will have to meet minimum deposit requirement of £100 and complete a KYC verification process as the broker is FCA regulated.

Pros:

Cons:

72% of retail investor accounts lose money when trading CFDs with this provider.

Step 2: Research Sainsbury’s Shares

Whether you’re investing in Sainbury’s shares or shares in similar companies like Tesco, Morrisons, Argos or Walmart, you always need to research before you make an investment decision.

Sainsbury’s shares have been under pressure for the past decade, or more accurately, since the 2008 economic global crisis. As a matter of fact, it is one of the most shorted stocks UK among hedge funds and big investment institutions. On the other hand, it is more than likely that Sainsbury’s stock currently trades at a discount, particularly when the company has seen strong demand during the Covid-19 pandemic crisis.

In this section of our guide, we’ll analyze the Sainsbury share price performance, the company’s dividend policy, and the reasons why you should consider buying Sainsbury shares.

How Much Are Sainsbury’s Shares Worth? Sainsbury’s Share Price History

Sainsbury was founded way back in 1869 by John James Sainsbury who had a small shop in London. In its early years of operation, Sainsbury has become very popular for offering basic and quality products at a low cost. By 1922, Sainsbury was the largest chain of grocery shops in the United Kingdom. The company, which was owned by the Sainsbury family at that time, went public in 1973 in one of the biggest-ever IPOs on the London Stock Exchange.

Moving forward, since the 2008 economic crisis, Sainsbury’s share price has been on a long steady downward trend, falling from 587p at the peak to 179p per share in September 2020. The shares have since moved upward to 256p per share, above the level they traded at prior to the pandemic.

Check out our Sainsburys share price forecast to see what are expert analysts see in the stock’s future.

Sainsbury’s Market Capitalisation, EPS and P/E Ration

Sainsbury’s has a market cap of £4.51bn, which normally makes it a favorable company for hedge funds and large institutions. Its price-per-earnings (p/e) ratio stands at 35.03, which is relatively high and indicates that investors are concerned but at the same time are willing to pay a higher price with the anticipation of future growth.

Sainsbury’s reported earnings per share (EPS) of 0.058c, which represents a decrease of 23% from the previous year. The company has also reported that grocery sales were by 10.5% and online digital sales more than doubled in the first half-year of 2020.

Sainsbury’s Shares Dividend Information

For investors, Sainsbury is clearly a favored dividend stock as the supermarket chain typically pays an interim and an annual dividend yield for shareholders. In normal circumstances, Sainsbury pays a fixed rate of dividend each year at a yield of between 4%-5%. However, as more companies have suspended or canceled dividend payments so far this year amid the coronavirus uncertainty, Sainsbury’s has also deferred its final dividend for 2019.

Should I Buy Sainsbury’s Shares?

Looking at Sainsbury’s share price performance, investors might be confused about where the share is headed next. On the one hand, Sainsbury’s shares have been trading near the historically lowest levels and though the retailer is somewhat immune to the Covid-19 economic crisis, implications of the pandemic are not yet known. On the other hand, Sainsbury’s is a strong business and it will be surprising to see the stock drifting much lower.

With that in mind, let’s take a look at some of the main factors to consider before buying shares of Sainsbury’s.

The Coronavirus Pandemic Impact on Sainsbury’s Share

The Covid-19 pandemic has had a huge impact on most businesses and the global economy in general. Luckily for Sainsbury’s, supermarket sales were strong during the Covid-19, including the periods of lockdowns. On the June 2020 earnings result, Sainsbury’s reported that its online digital sales more than doubled, and total retail sales grew by 8.5%. Further, Sainsbury’s is expected to report a net profit of £445m by the end of the year, which is almost the same net profit of £471 (after tax) in 2016 and above 2017’s net profit of £371 in 2017. The data suggest that Sainsbury’s is currently trading at a fairly cheap price.

But although Sainsbury’s has benefited from the Covid-19 situation, it is still facing £500m of extra costs as a result of the pandemic crisis. As such, Sainsbury had to put its final dividend on hold until the Covid-19 crisis will ease down.

Sainsbury’s is a Digital-First Business

Due to the Covid-19 pandemic, Sainsbury had to make a shift in its strategy to become a functional digital business. As such, digital sales have become a growing portion of overall sales, and Sainsbury’s SmartShop app is used in 37% of the total transactions on average. To manage the operation, Sainsbury’s said it plans to double capacity and it will then be able to deliver 700,000 online grocery orders every week. Sainsbury’s executive chief said: “Our business has fundamentally changed, customers are shopping very differently. The business has changed the way it works,”

This makes Sainsbury’s a digital-first business. To improve its service, Sainsbury’s is also using big data and analytics to drive its digital strategy.

A Large Market Share in the UK

In terms of market share, Sainsbury’s has always been a leading player in the UK grocery market. According to Kantar, Sainsbury’s market share has dropped to 14.9% from 16% in 2019, and at some point, Sainsbury’s lost the second spot to ASDA. However, very soon Sainsbury’s has returned to its position as the second-largest supermarket chain in the UK, behind Tesco at 26.8% and slightly ahead of Asda at 14.5%

Sainsbury’s Shares Buy or Sell

Sainsbury’s shares have been on a wild ride over the past year. The company’s shares were down through last summer even though Sainsbury’s stores remained open, but the share price has jumped to 256p in the last 6 months. That’s higher than the share price before the pandemic.

In the short-term, we think Sainsbury’s is a buy. The company has a 15% share of the UK grocery market and has been competitive in the fight to attract customers over the past year. Easing restrictions should also help Sainsbury’s profit margins, which will boost the stock price.

Over the long term, however, we’re more skeptical of Sainsbury’s ability to compete. The chain faces stiff competition from traditional grocers like Tesco as well as newcomers like Ocado that are bringing automation into the grocery market. Sainsbury’s has also been in a long-term decline that shows few signs of wearing off, despite the recent share price recovery.

We still recommend Sainsbury’s as a buy. However, investors should carefully watch the company to see how its market share and profit margins change over time. If Sainsbury’s proves unable to stay ahead of emerging trends in curbside pickup and online groceries, then you should reevaluate whether this stock is worthwhile.

The Verdict

Sainsbury’s is the second largest chain of supermarkets in the UK and one of the oldest and most resilient companies traded on the London Stock Exchange. Over the past decade, however, the company has struggled and its share is currently trading at its lowest level since 1995. While there’s uncertainty around when and how Sainsbury’s share will rise again, most analysts believe that Sainsbury’s is an attractive long-term investment opportunity right now.

If you ready to buy Sainsbury’s shares, simply click the link below to get started!

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