The travel industry has had one of its worst years on record. Thanks to the coronavirus pandemic, international travel came to a halt, airlines grounded their fleets, and hotels closed their doors to visitors.
Few companies were hit harder than TUI AG, the largest leisure travel and tourism company in the world. This German firm saw its revenue dip by as much as 97% at the height of the lockdowns.
With travel expected to pick up in 2021, however, TUI stands to get back to business. So, is now the right time to buy TUI shares in the UK? In this guide, we’ll explain how to buy TUI shares in the UK and take a closer look at whether this travel company is a strong investment.
- 1 Step 1: Find a UK Stock Broker That Offers TUI Shares
- 2 Step 2: Research TUI Shares
- 3 TUI Share Price History & Market Capitalisation
- 4 TUI Shares Dividend Information
- 5 Should I Buy TUI?
- 6 Step 3: Open an Account and Deposit Funds
- 7 Step 4: Buy TUI Shares
- 8 TUI Shares Buy or Sell?
- 9 The Verdict
- 10 eToro – Buy TUI Shares with 0% Commission
- 11 FAQs
TUI trades on the London Stock Exchange and is a member of the FTSE 250 index. So, the majority of UK brokers offer stock trading for this travel company.
However, there’s more to choosing a stock broker than just what shares are offered. When picking a broker, it’s important to look at factors like cost, customer service, and regulation. You’ll also want to consider the broker’s trading platform, since this is what you’ll use for the bulk of your stock research and analysis.
With that in mind, let’s review two of our top-recommended brokers in the UK that you can use to buy TUI shares today.
1. eToro – Social Trading Network with 0% Commission
eToro is one of the all-around best brokers to buy shares in the UK. This platform offers trading on over 800 stocks, including most of the companies in the UK’s FTSE 250 index. On top of that, eToro has a selection of more than 450 ETFs, dozens of forex pairs, commodities, and cryptocurrencies.
What’s especially nice about eToro is that you can choose between share dealing and CFD trading when buying shares. All share CFD trades are 100% commission-free, and eToro charges spreads that are typically well below the market average. This broker also offers leverage of up to 5:1 when trading share CFDs. The only catch is that eToro charges a £4 withdrawal fee and a £15 inactivity fee after one year without trading.
eToro also stands out for its trading platform. The broker offers a robust social trading network that includes millions of other traders and investors from around the world. You can see what stocks are popular, follow friends and expert traders, or share trading strategies. eToro also supports copy trading, so you can set your portfolio to automatically mimic the positions of a professional trader.
When it comes to doing your own stock analysis, eToro offers everything you need and more. The broker’s proprietary charting platform, available for web and mobile, comes with 100+ built-in technical indicators and drawing tools. eToro also provides access to analyst research, including 12-month price targets, and a market sentiment gauge that shows what other traders are buying and selling.
eToro offers 24/5 support and is regulated by the UK’s Financial Conduct Authority. All UK accounts are backed by the government’s Financial Services Compensation Scheme.
- 800+ global shares
- Supports share dealing and CFD trading
- 100% commission-free share CFD trading
- Social trading network with copy portfolios
- Regulated by the FCA
- Withdrawal and inactivity fees
67% of retail investor accounts lose money when trading CFDs with this provider.
2. Skilling – Commission-free CFD Trading with Advanced Platform
Skilling is another excellent choice for equity trading in the UK. This brokerage platform offers more than 700 share CFDs from the UK, US, and Europe. In addition, Skilling offers over 70 forex pairs and 10 top cryptocurrencies if you want to expand your investing beyond the stock market.
All CFD trades at Skilling come with 0% commission. The broker’s share CFD spreads are typically below market average (0.3% was common for UK shares), and Skilling is upfront about the minimum spread for every share it offers. In addition, Skilling takes a light touch when it comes to account fees. The only charge to note is a £10 fee after one year of inactivity, and you won’t be charged again until another full year of inactivity goes by.
Skilling offers two different trading platforms for share trading: Skilling Trader and Skilling cTrader. Trader is a basic platform that offers quick-view charts and a handful of common indicators. cTrader is a more advanced trading platform with dozens of technical studies, drawing tools, and support for algorithmic trading. The two platforms are integrated, so you can easily switch between them depending on what tools you need for analysis.
We also liked Skilling’s Trade Assistant, which is a handy feature for beginner traders. This tool walks you through the process of buying your desired shares (or another asset) and explains all of the parts of your order along the way. You probably won’t need Trade Assistant after you get the hang of Skilling Trader, but it’s nice to have at first.
Skilling is regulated by the Cyprus Securities and Exchange Commission (CySEC) and offers negative balance protection for UK accounts. Note that the company only offers customer support during business hours, not 24/5.
- 700+ share CFDs
- Commission-free trading with low spreads
- Very limited account fees
- Trader and cTrader platforms
- Trade Assistant helps beginner traders
- Limited customer service hours
Your capital is at risk.
Before you buy TUI shares, it’s important to do your research. Given the state of the travel industry, TUI should be considered a high risk investment. Let’s take a closer look at this company’s history and its path for recovery in the wake of the COVID-19 pandemic.
TUI AG, also known as TUI Group, is a German-English multinational tourism company. The company has its roots in Preussag AG, a German mining company that was formed in 1923 and which renamed itself TUI in 2002.
Throughout the early 2000s, TUI transitioned from a mixed focus on tourism and international shipping to focusing solely on tourism. In 2014, TUI began trading on the London and Frankfurt Stock Exchanges at a share price of £10.96.
TUI’s share price remained relatively consistent through most of 2017, despite the growth in international travel during this period. The share price ultimately rose to a high of £18.92 in May 2018, but then tumbled to just £7.30 by early 2019 as rival tourism company Thomas Cook collapsed. After Thomas Cook shares ceased trading, TUI’s share price recovered to £10.75.
Shortly after, the COVID-19 pandemic hit TUI shares extremely hard. TUI stock fell to as low as £2.18 and was hovering around £3 for much of the summer. The stock price spiked to £5.46 on news of the Pfizer and Moderna vaccines, but has since fallen back to £4.03 per share.
At the current share price, TUI has a market cap of £2.38 billion and price to earnings (P/E) ratio of 5.57. The company reported an earnings per share of £-2.33 for the second quarter (ending in June) on a loss of nearly £1.4 billion. TUI aggressively cut costs over the summer, but still reported a net loss of £-2.26 per share in the third quarter on £1.3 billion in losses.
TUI was once considered a very strong dividend stock for UK investors. In 2019, the company paid out a yield of 4.9%, and most analysts were expecting that to rise to 6% in 2020.
However, like many of its peers, TUI canceled dividend payments in March and has not made any plans to resume payouts to investors. The company has taken on a significant amount of new debt to survive the pandemic, so it is unlikely that a new dividend will be declared until 2023 at the earliest.
Should I Buy TUI?
Still, we recommend caution around TUI shares. There are some promising signs for this company, but also some red flags that investors need to be aware of.
The most important thing that TUI has going for it is the expected recovery in UK and European travel in 2021. The company announced over the summer that summer 2021 bookings are up by 145%, as customers not only rebook travel from 2020 but also book new holidays post-pandemic. Given how effective the COVID-19 vaccines have proven, it’s likely that TUI may see an even bigger bump next year than anticipated.
Importantly, TUI hasn’t mortgaged its future during the pandemic. The company took on debt as opposed to selling off assets, so it still has all of its plane fleets, high street office locations, and tourism infrastructure. That, combined with the widespread recognition of the company’s brands and the elimination of Thomas Cook as a rival firm, should help TUI capture the bulk of new travel business arriving in the next year.
While there is at this point little question around whether TUI will survive the pandemic, the company will be dealing with the effects of this year’s travel shutdowns for a long time to come. TUI took on nearly £4 billion in new debt this year to get through the crisis, on top of the more than £2.4 billion that the company already had. The company reported a debt-to-capital ratio of 97% with its third-quarter earnings.
That amount of debt is in many ways crushing. It limits TUI’s ability to raise new capital either through lenders or bonds. It also restricts the company’s ability to make adjustments to new travel behavior in the wake of the pandemic. That could end up hurting TUI’s long-term growth and make room for more nimble competitors.
More immediately concerning to shareholders, TUI has raised the prospect of a secondary stock offering to raise capital and pay down debt. A secondary offering would instantly dilute the value of existing shares, which is bad news for anyone holding TUI stock at the time.
Step 3: Open an Account and Deposit Funds
We’ll show you how to buy TUI shares in the UK using eToro. This broker offers 0% commission trading, a social trading network, and a wide range of assets for trading.
To get started with eToro, head to the broker’s homepage and click ‘Join Now.’ You can create a new account with eToro or sign up using your Google or Facebook accounts.In order to comply with UK government regulations, eToro requires that you verify your identity before you can start trading. This step is easy to complete online. Just upload a copy of your passport or driver’s license along with a copy of a recent bill that shows your address.
Next, you can fund your eToro account. The broker requires a minimum deposit of £140. eToro supports a wide variety of payment methods, including bank transfers, credit or debit cards, and e-wallets like Neteller and Skrill.
Now you’re ready to buy TUI shares with eToro. From your account dashboard, search ’TUI’ and click ‘Trade’ when the company appears in the drop-down menu.
In the order form, enter the amount of TUI you want to purchase in pound. eToro allows you to buy fractional shares as long as you invest at least £40. You can also set a stop loss or take profit level for your order, and select whether to leverage your trade (up to 5:1).
When your order is ready, click ‘Open Trade’ to buy TUI shares with eToro.
TUI shares look extremely cheap at the moment, which makes them quite tempting for investors. However, the company’s enormous debt burden and the prospect of a secondary stock offering make this company a risky investment.
If travel rebounds more quickly than expected and TUI avoids a secondary offering, anyone who buys shares now will be generously rewarded. On the other hand, if TUI does dilute its shares with a secondary stock offering, it could take years to see a profit from this travel company.
Overall, we think TUI shares are a good buy for risk-tolerant investors with long time horizons. If you can buy up shares at the current low price and hold them for at least several years, we think TUI offers a lot of promise. If you’re more interested in a short-term play around the pandemic recovery, look elsewhere in the travel industry (such as to airlines like Easyjet).
Leisure travel giant TUI was hit harder than most other companies by the COVID-19 pandemic. The company went from being highly profitable to losing money almost overnight. While TUI will make it through the crisis, surviving meant taking on an enormous debt load that could hurt the company for years to come.
Still, the recovery in travel presents an opportunity for investors. TUI shares are still trading at a significant discount compared to the start of the year, and the company stands to benefit from a quick recovery in travel and tourism next year.
Ready to buy TUI shares in the UK? Click the link below to sign up for an eToro account and start trading today!
67% of retail investor accounts lose money when trading CFDs with this provider.
What exchange does TUI trade on?
TUI trades on both the London and Frankfurt Stock Exchanges. It is a member of the FTSE 250 index.
Who is TUI’s current chief executive officer?
The current CEO of TUI is Friedrich Joussen, who has been at the company’s helm since 2013.
Can I buy TUI shares with an ISA or SIPP?
Yes, you can buy TUI shares with an ISA or SIPP. Since this company is part of the FTSE 250, most UK brokers offer TUI shares for trading and investing.
What travel brands does TUI own?
TUI owns a number of travel brands including First Choice, Marella Cruises, Crystal Ski Holidays, TUI Sensatori, TUI Airways, and SplashWorld Resorts.
How much revenue does TUI generate?
TUI made £18.9 billion in revenue in 2019, but is expected to generate just £7.9 billion in 2020.