SSE plc is a Scottish energy company that specializes in low-carbon infrastructure and is one of the largest energy firms in the the United Kingdom and Ireland. The Scottish and Southern Energy, also known as SSE, was formed in 1998 following a merger of Scottish Hydro-Electric and Southern Electric, and since then the SSE share price has been on a long upward trajectory. But in 2020, SSE shares have plummeted by around 8% and some analysts believe that this share is currently undervalued.
If you are based in the UK and looking to buy shares of SSE plc, this guide will help you find the right direction. We’ll walk you through the process of how to buy SEE shares online in the UK, suggest top brokers, and analyze the SSE share price performance.
The Scottish and Southern Energy (SSE) is a public listed company on the London Stock Exchange under the ticker symbol SSE. As such, you will find out that the majority of UK stockbrokers enable investors to trade SSE shares. However, like any other investment you make, you want to make sure to choose a trusted regulated broker that offers low trading fees, an advanced trading platform, and effective features.
With that in mind, let’s take a look at two of our favorite online UK brokers that offer share trading, including SSE shares.
1. eToro – Buy SSE Shares with 0% Commission
Our most recommended brokerage firm that allows investors to buy and sell shares of SSE is eToro, which is the largest social trading platform in the world with more than 12 million registered users on its network. This broker was founded in 2006 with the vision of creating a social trading experience where investors can interact with each other and make joint trading decisions.
The broker supports thousands of financial instruments including shares from 17 different stock market exchanges. As this includes the London stock market, you’ll get access to SSE shares. Crucially, share trading at eToro is commission-free and comes with a leverage of 5:1 for UK investors. This means you can buy shares with five times the amount of your investment. When it comes to buying The Scottish and Southern Energy (SSE) shares, eToro enables you to invest in fractions of a share and as such, the minimum investment stands at just $50 (about £40).
Best of all, eToro supports social trading, meaning investors get access to lots of social trading features and tools. eToro is a user-friendly platform that is suitable for levels of traders so if you are a beginner, you can simply copy the trades of other top performing traders using a tool called CopyTrade. This feature makes it easy for users to invest in various products without needing to conduct market research.
If you want to get started with eToro and buy shares of SSE, you need to meet a minimum deposit requirement of around £150. When it comes to regulatory standing and security of funds, eToro is heavily regulated by the FCA, CySEC, and ASIC, and your funds are protected by the FSCS scheme.
67% of retail investor accounts lose money when trading CFDs with this provider.
2. Plus500 – Trade SSE’s Share CFDs with Tight Spreads
Plus500 is another very popular CFD platform in the UK and worldwide. Much like eToro, Plus500 offers commission-free share trading, but it is a somewhat better option if you want to engage in short-term trading. The key strength of this broker is the low trading commission and the tight spreads it offers. That makes Plus500 especially suitable for active day and swing traders.
The broker has a very simple to use trading platform, with a basic technical analysis charting package. On the fundamental side, you also get access to a news feed and an economic calendar. If you are looking for unique features, you’ll get access to a market sentiment tool, plenty of risk management tools, and a price alerts service.
All in all, Plus500 offers a great trading experience for all types and levels of traders and investors. You can also open a demo account to test the platform and see if you like it. To get started, however, you will need to deposit £100 to be able to trade the live markets.
- A commission-free trading account
- Tight spreads and low fees
- A leverage of 5:1 on shares
- User friendly trading platform, available on web browsers and mobile phones
- Plenty of features including risk management tool, price alerts and trader’s sentiment tool
- Regulated in the UK by the FCA
- Not a social trading platform
- Offers to trade on CFDs only
76.4% of retail investor accounts lose money when trading CFDs with this provider.
Before you make an investment in SSE energy or any other share for that matter, it is important you make your own research on the share price performance, the company’s financials, and the latest news. This is more relevant in the case of the mini-crisis caused by the Covid-19 pandemic since March. Shares like Taylor Wimpey, Standard Life Aberdeen, and Sainsbury’s have been declining since the coronavirus outbreak and it is now the time to check whether these shares, as well as SSE shares, are trading at a fair discount.
In the section below, we take a closer look at the Scottish and Southern Energy (SSE) share performance to help you decide whether this is the right investment for you right now.
SSE Energy plc was formed in 1998 following a merger between the Scottish Hydro-Electric and Southern Electric. Shares of SSE, however, trade on the London Stock Exchange since 1989 when Southern Electric first went public on its own. The new group made several notable acquisitions since the merger including Ferrybridge and Fiddlers Ferry Power Stations, SWALEC energy supply business, Airtricity Holdings, and the Uskmouth power station from Welsh Power Group Limited. Ultimately, SSE has grown to become one of the largest companies in the United Kingdom.
This gigantic energy company has 20,750 employees as of 2019 and a market capitalisation of £13.92bn at the time of writing. Since it went public, the share has been on a very long upward trajectory, particularly following the successful merger. Before 2020, the SSE share price reached its all-time high of 1667p in 2007, and since then, the share has been trading in a relatively narrow range in the past decade. The SSE share’s sentiment was very positive at the beginning of the year and the share price eventually broke the all-time price of 2007, reaching a peak of 1686p on 21 February.
With the Covid-19 pandemic, sentiment over SSE shares shifted and the stock fell drastically to a bottom price of 1072p on 23 March. The Saudi-Arabia Russia oil crisis in March 2020 was another crucial factor that had a negative impact on shares of SSE. However, the SSE share has formed a double bottom formation when the share fell again to1073p in April, and since then, it has recovered to nearly 30% from the yearly low.
SSE Shares Fundamentals – Market Cap, P/E Ratio and EPS
With a market capitalisation of £13.92bn, SSE Energy (LON: SSE, ISIN GB0007908733) is one of the largest firms in the United Kingdom. This means that SSE is a constitute of the FTSE 100 index and a favorite stock by hedge funds and large institutions.
The P/E ratio currently stands at 32.9, which is way above the average in the industry of 12.51 and generally indicates that investors expect higher earnings. In the Q1 of 2020, SSE has reported an EPS (earnings per share) of £0.41, with a current EPS growth of 35%. The energy company forecasts an EPS of 83p-88p range for the entire financial year.
SSE Energy is considered one of the most stable dividend stocks in the UK as it typically pays investors interim and annual dividends. Moreover, while the majority of UK and global companies have canceled their 2019 dividend payment, the SSE board of directors has paid a 56p per share dividend yield for the previous year in September 2020.
At present, SSE has not scrapped dividend payment due to the Covid-19 uncertainty and investors could take advantage of the current 6.8% yield which is significantly high in the current market circumstances.
SSE share price has plunged in value this year as the Covid-19 pandemic and the 2020 oil crisis lowered the demand for energy products. But as stock markets are in bullish mode and expected to stay in that mode for the near future, some market analysts have pointed out that SSE share price has a huge growth potential and is currently undervalued. With that in mind, it is still important to understand the risk comes with investing in this company. SSE Energy is a utility company and as such, is very dependable on the global demand for energy consumption.
Nonetheless, let’s take a close look at some of the reasons why analysts are bullish on SSE shares.
Investing in Renewable Energy
SSE Energy is one of the leading renewable energy services companies in the UK. It has a division called SSE Renewables that is in charge of developing and operating renewable energy products as well as the Green energy segment that distributes renewable, clean electricity. Consequently, SSE reports that nearly 40% of its income derives from renewables, which simply means that if you believe in renewable energy, SSE is one of the best shares in the UK for that purpose.
Looking ahead, it seems that SSE plans to continue its growth as a renewable power business. According to the managing director of SSE Renewables, Sam Smith, SSE plans to expand its wind farms business to new markets like northern Europe, the US and Japan within the next five years.
A Top Passive Income Share
The fact that SSE Energy maintains its dividend payments despite the Covid-19 uncertainty makes SSE one of the top passive income shares in the market right now. In the current situation in the markets, most companies have canceled their dividend payment until further notice, which may attract investors to buy SSE shares for dividends. Evidently, in June, SSE shares spiked 9% following the company’s recommitment to its dividend plans.
Overall, A Healthy Balance Sheet
Like the majority of global companies, the coronavirus has had a huge impact on SSE. In June, that company reported its operating profit could be hit by £150-£250 from the Covid-19 crisis. Moreover, SSE has a high amount of 68.91% debt ratio, which is a concern for investors.
However, it appears that SSE has made some crucial deals to finance its operation for long term growth. As such, SSE has recently sold its share in three energy-from-waste facilities for £1bn, a deal that strengthens the company’s balance sheet and will help SSE to initiate its low-carbon energy infrastructure investment that is expected to take place over the next five years. In January, SSE sold to retail business to Ovo Group for £500mln.
Generally, it is clear that SSE plans to make a shift in its strategy towards low-carbon assets and green energy solutions. Investors may be rewarded if the company’s plan to invest in low-carbon facilities turn to be positive.
Step 3: Open an Account and Deposit Funds
After you have done your SSE share research and you are ready to buy SSE shares, the next step is to open an online trading account with a trusted broker. The process remains largely the same on most online platforms so we chose to walk you through the process with our recommended broker, eToro.
To get started, you need to visit eToro’s official website and click on the ‘Join Now’ button. You will then see a registration form where you need to enter your email address and insert a username and password.
Next, you’ll have to complete a short questionnaire that includes your personal details, financial background, and your trading/investing experience. As eToro must comply with FCA rules and restrictions, you’ll also be required to verify your identity by uploading a copy of your passport or driver’s license along with a copy of a recent financial statement or utility bill.
When it comes to depositing at eToro, you’ll need to meet a minimum requirement of around £150. You will also have to take into consideration a conversion fee of 0.5% as the broker maintains all accounts with US Dollars.
As soon as your account is approved, you can fund your account using one of the provided payment methods:
- Debit Card
- Credit Card
- UK Bank Transfer
Now that you have funds in your trading account, you are ready to buy SSE shares. From the eToro’s trading dashboard, click SSE in the search bar at the top of the screen and then click on the first result that pops up.
On the next page, simply click on the ‘Trade’ button.
Then, you’ll be taken to an order form where you need to enter the amount that you wish to invest in SSE, with a minimum investment requirement of at least £40. This will determine the number of shares in SSE you buy. To complete the purchase, click on the ‘Place Order’ button or ‘Set Order’ (if the order is inserted outside market hours).
For long term investors, SSE Energy shares seem to be an ideal investment, largely due to the company’s decision to keep its dividend policy unchanged and the share drop in value that may suggest a great long term investment opportunity.
As SSE may be considered in the mid-stage of development, it clearly has a lot of growth potential for both the expansion of the company and the share price. Whether it will be the most dominant renewable energy provider in the UK remains to be seen, however, there’s no doubt that it will have a substantial market share in the energy market in the UK, and worldwide.
In the past month, SSE share has rallied from 1189p to 1347.5p, an increase of 13%. The likely reason for the rally was the positive market sentiment following the company’s deal to sell its share in three energy-from-waste facilities for £1bn, the rally in the stock markets caused by the stimulus deal, and the fact that SSE Energy is one of the few companies in the UK that still pays dividends.
Though there are many risks involved in the stock market right now, we can say that SSE shares are worth buying right now for a long term position.
In summary, SSE shares have been extremely volatile over the past year as investors have been swung between a flow of good news coming from SSE and the economic turmoil that emerged in the stock markets following the Covid-19 outbreak. Nevertheless, SSE might be undervalued, particularly when taking into consideration the company’s plan to invest around £7.5bn in decarbonization projects in the next five years. This could present a great long-term investment opportunity for investors who have faith in the prospects of SSE Energy.
If you ready to buy SSE shares, simply click the link below to get started!
67% of retail investor accounts lose money when trading CFDs with this provider.
Who is the chief executive of The Scottish and Southern Energy (SSE)
Alistair Phillips-Davies is the chief executive officer of SSE plc since 2013
What stock exchange is SSE Energy listed on?
SSE has a primary listing on the London Stock Exchange (LSE: SSE) and is part of the FTSE 100 index.
Does SSE Energy pay dividends?
Yes, SSE pays its interim dividend each year in March and annual dividend in September. It is, in fact, one of the best UK utility stock to buy for a dividend income.
How do I buy shares in SSE?
There are many choices as to how and where you can buy shares of SSE. As it is one of the most well-known public stocks in the UK, most brokerage firms, as well as investment banks, allow you to buy this share. With that in mind, you must take into consideration the high management fees and transaction fees when choosing this option. As such, if you are looking for a cost-effective solution, we suggest you try a CFD brokers like eToro or Plus500, which are commission-free online brokers.
Can I invest in SSE via an ISA or SIPP?
Yes, you can. All you need to do is find an ISA or SIPP account that enables you to buy individual shares like SSE Energy. Otherwise, you can search for investment trusts that contain SSE shares.
Who is the CEO of SSEO?
The current CEO of SSE is Alistair Phillips-Davies. Martin Pibworth is the Group Energy Managing Director, while Louise Innes is the commercial director.