How to Buy BT Stock in 2021
BT's stock may be an excellent opportunity after trading near its historic lows in 2021. Yet, can it muster enough market enthusiasm to score a rebound this year? If you're interested in buying BT shares for the first time, you might want to go through the following sections. This article offers you an overview of the company and its activity and analyzes its investment potential.
Learn How to Buy BT Stocks in 3 Easy Steps
Find a Broker
The first thing you need to do is open an account with a well-regulated broker that will provide you the platform and tools to start trading BT shares. You need to fill in your personal information, read the terms and conditions, and familiarise yourself with the broker’s trading platform. You may also want to find out more about fees and commissions at this stage.
Analyse a BT Chart
You'll find a charting application on your broker's platform, which you can use to analyse the BT share price. Use this to find a good price level to open your trading position. There are numerous firm-specific indicators you may find on your broker’s platform, such as historical share prices. If you are a beginner, you may want to read the educational section first to help you with chart analysis.
Once you spot your opportunity, you need to place your first BT trade. You should also make sure your account is fully verified and funded before making your first investment. Typically, stock purchases show immediately in your portfolio, so you can buy BT stock, along with other financial assets to diversify your investment.
BT Company Overview
BT Group PLC is a British telecommunications company headquartered in London that provides communication services worldwide. In the U.K., it's the largest provider of fixed-line, broadband, and mobile services and operates in several business segments, including consumer, global services, enterprise, and others.
BT Business Model and Revenue Streams
According to Forbes, BT was the top 19th British company by revenue and was among the top 100 digital companies in the world in 2019. As of this writing, its market value is £17.5 billion.
BT's total revenue in 2020 totaled £22.9 billion ($31.9 billion). Its consumer organizational unit leads the other segments in revenue contribution; the latest quarter (Q2 FY 2020/21) generated £2.5 billion ($3.5 billion). Under the consumer segment, BT owns brands EE Limited and Plusnet and provides broadband, home phone, and TV services.
Its second-largest revenue stream comes from its enterprise segment, which, in the same quarter, produced £1.35 billion ($1.9 billion). Enterprise connects business customers and public sector organizations using BT's communications and IT solutions.
BT's Openreach generated £1.29 billion ($1.80 billion) in Q2. This segment deals with the maintenance of telephone cables, ducts, cabinets, and exchanges that connect U.K. homes and businesses to the national broadband and telephone network.
Finally, its global segment provided £926 million ($1.28 billion) in revenues. This is the business segment that provides global security, cloud, and networking services to different companies worldwide.
History of BT
BT's beginnings date back to 1846 when the first public telegraph company in the U.K. was founded, the Electric Telegraph Company. BT Group was founded in 1912 once a Government department took over the nationwide communication network started by the Electric Telegraph Company. The Government would still have half of the stakes in the company until it eventually sold the rest in 1991 and 1993.
Between 1994 and 2000, BT had two bids to penetrate the North American market through a joint venture called Concert Communications Services, which was initially worth $1 billion. After failing to forge two business relationships, initially with MCI Communications and later AT&T, Concert's assets would eventually be divided between AT&T and BT to be merged into regional operations in 2002.
BT made several acquisitions in 2005, including Infonet, a telecoms company in California, Albacom in Italy, and Radianz from Reuters (now known as BT Radianz). In the same year, Openreach was created but didn't open for business until January of the following year.
In 2007, the company acquired Plusnet for a deal valued at £67 million, adding 200,000 more customers. The company announced that it connected its ten-millionth broadband line that year, surpassing its five-million target in 2006.
BT introduced MyDonate in 2011. MyDonate is a fundraising service for U.K. charities. In 2016, BT officially acquired EE for £2.5 billion and became a second consumer division. Two years later, it announced structural changes that combined its BT business and public sector and BT wholesale and venture divisions into one enterprise.
Brokers That Offer BT Shares
Here are our top choices of online brokers that offer BT stocks on their platform. Based on our objective review, we found that these brokers provide the best support and analytical tools to buy or sell BT and other stocks.
Should I Invest in BT Stock?
There are risks to bear in mind when investing in BT, such as intensifying competition for market share, notably with the O2 and Virgin Media merger expected to finalise this year. Another risk is the technological changes within the telecom industry that pose a challenge for all firms involved in the space -- not to mention its price's currently depressed levels. But, despite all of this, BT remains the leader in the telecom industry in the U.K. Let’s have a closer look at BT’s investment potential and other aspects you should consider before opening your position.
BT Stock Investment Potential
BT's depressed levels may suggest good news for investors as this could signify that a likely bottoming out could take place. Analysts have also increased their price target of BT (GBX 190 to 200), particularly Credit Suisse, noting that it is reaching an inflection point and could be on track to make "one of the strongest" post-COVID rebounds. The Swiss bank's upgrade stems from the high expectations of an ongoing roll-out of high-speed internet, which is measured in FTTP connections.
From a technical perspective, several indicators are also bullish on both daily and weekly timeframes. These include the long-term moving averages (100 and 200), the MACD, and momentum indicator.
What Kinds of Investors Should Include BT in Their Portfolios?
One of the main concerns is the growing debt pile that has caused the market to repeatedly sell BT stock despite reporting net profits for years. Its total debt in 2020 ballooned to £25.8 billion, exceeding reported revenue.
On the good side, investors who'd find a fit for BT shares in their portfolio are those confident in BT's prospects. This is especially relevant as BT is now getting involved in the growing 5G industry after announcing investment plans last year.
Investors would also be glad to know that the company stands to benefit from the "super-deduction" policy. This could reduce the tax bill by 130% since Openreach has spent millions on upgrading the U.K. broadband network to FTTP.
How Much Should I Invest in BT
The exact amount to invest in BT or any stock depends on your personal circumstances. Once you know how much BT is per share and its growth potential, you'll be able to determine how much capital you should expose to this company.
New investors may be willing to make a smaller investment at first. It’s also important to know how much extra capital you have and how open you are to risk.
It would help if you also thought about how frequently you will be putting funds in this stock. For instance, do you plan on making a lump sum or regular purchase? Once you determine these aspects, you can decide the appropriate amount to invest in this individual stock.
How to Buy Shares in BT Stock?
So, as stated, you need the help of a broker to access BT shares and trade them. Make sure you analyse all of your options and choose an online broker that fits your needs. It’s also essential to identify all the fees and commissions associated with these services.
Direct Stock Purchase Plans or DSPP is another excellent way to purchase shares. This method doesn't require a middleman (i.e., a broker) to process your share purchases. Instead, you are buying directly from the company.
Buy BT Shares Using a Broker
To get started with your account application, you first need to fill up an online form on your broker's website. Along with this form, you also need to submit some necessary supporting documents. The approval time may vary, but it usually takes a few working days.
Apart from these, the application form may ask you to disclose a rough estimate of annual income and net worth. It may also inquire about your investment objectives, risk tolerance, employment status, and occupation.
Once approved, you can proceed with funding. Broker's trading plarforms have different funding methods, so all you have to do is choose the most convenient one for you. Common deposit methods include debit or credit card transfers and e-payments. When your trading account reflects the amount you deposited, you can now initiate your first BT trade.
Buy BT Shares With a Direct Stock Purchase Plan (DSPP)
BT offers something similar to a DSSP, known as a Dividend Reinvestment Plan or DRIP. A DRIP reinvests the cash dividends you receive into new shares of BT automatically. If you're interested in using this method to invest in BT, you can contact the company’s transfer agent.
The advantage is that you don't have to pay a fee per transaction, but you have to open an account for each company you want to buy. You should also cover the setup fees and initial investment requirements that vary among companies. This method might not be convenient if you plan to create a highly diversified portfolio.
Frequently Asked Questions
BT is presently trading near its all-time lows, and it has recently reached a price level it hasn’t touched since 2009. Despite this, analysts expect the stock to have great potential this year, with the highest price target at GBX 260.
BT Group is a consistently profitable company. In 2020, it garnered £1.73 billion ($2.41 billion) in net income.
BT's average daily volatility (GBX 4.87) and trading volume (16.54 million shares) are sufficient to allow any trader to profit from short-term trading. This may also be an excellent long-term opportunity, given the company’s history and market share.
The platform most suited for trading BT shares should have a complete set of technical analysis tools to accurately analyze its price movements. It should match your knowledge and expertise in this field to efficiently take advantage of all of its features.
BT Group stock’s trading hours are between 3 A.M. and 11 A.M. (ET).
BT Group is listed on the London Stock Exchange (LSE) under the symbol BT.