How to Buy IAG Stock in 2021
Have you decided to buy IAG stock, or are you still unsure if it is worth it? IAG stock may be an excellent opportunity for numerous investors. Check out the following sections to find out more about the company, its investment potential, and whether you should add this business to your investment portfolio.
Learn How to Buy IAG Stocks in 3 Easy Steps
Find a Broker
You need to find a well-regulated broker and open a trading account. This will help you access the financial markets, so you can start trading IAG shares and other assets. Brokers request information from you to comply with certain rules and regulations. They need to ensure that they follow anti-money laundering policies, anti-terrorist financing requirements, tax laws, and record-keeping procedures.
Analyse IAG Chart
From your trading account, you can access company information. There are numerous charts showing pricing movements and other IAG indicators. Once you analyse them, you will be better informed, so you can decide whether IAG is suitable for your investment portfolio. Additionally, brokers provide such detailed information regarding numerous other assets, so you can use these tools for your entire portfolio.
After you have an open trading account funded with your capital, you can start trading IAG stocks. The best brokers will also offer access to numerous other stocks and financial assets that you can add to your new portfolio, according to your strategy and objectives. Make sure you are familiar with all the trading fees and commissions before making your investment.
IAG Company Overview
International Consolidated Airlines Group SA., known as IAG, is a Spanish-registered multinational airline company headquartered in London and is led by Luis Gallego, the former CEO of Iberia. It was one of the largest companies in the U.K. by revenue in 2019. Let’s find out more about the company, its revenue-generating operations, and its history.
IAG Business Model and Revenue Streams
Apart from British Airways, some of its other wholly-owned airlines include Iberia, Aer Lingus, Sun Air of Scandinavia, Iberia Regional (Air Nostrum), BA CityFlyer, Iberia Express. It also owns 97.52% of the Spanish low-cost airline, Vueling. IAG operates a fleet of over 533 aircraft and covers 279 destinations.
Not unexpectedly, it was impacted by the coronavirus-related travel restrictions and has reported a net loss after years of net profit. As a result, in 2020, Its revenue dropped to €7.8 billion ($9.32 billion) from €26.41 billion ($31.57 billion) in the previous year.
IAG generates its income primarily from its subsidiaries. These are, of course, derived from passenger revenues, reporting €5.5 billion ($6.57 billion) in 2020. This was a 75.5% reduction compared to 2019.
The airline company that contributed the most passenger revenue in 2020 was British Airways, reaching £2.8 billion. Iberia comes in second with €1.16 billion, followed by Vueling with €569 million, and Aer Lingus with €379 million. IAG also generated revenue from 4,003 cargo-only flights in 2020, transporting vital equipment like PPE, ventilators, and COVID-19 test equipment, while some were repatriation flights.
History of IAG
IAG is the byproduct of the merger between British Airways and Iberia in 2011. In 2012, the company created Iberia Express, a Spanish low-cost airline for short- and medium-haul flights. It also purchased British Midland Airways for £172.5 million.
The following year, IAG successfully acquired a majority stake in Vueling for €123.5 million ($160 million at that time), supplementing the existing ownership of 45.85%.
Two years later, it purchased the Irish airline Aer Lingus for €1.5 billion. Then, in 2017, it launched its new low-cost long-haul airline called Level, which started operating from Barcelona.
In 2019, IAG announced its plan to acquire Air Europa for €1 billion from Globalia, but the deal was amended to €500 million in 2021. IAG's stock shed 63.32% of its value due to the pandemic.
Brokers That Offer IAG Shares
Below, you will find our top choices of brokers that offer IAG shares. We've reviewed each company, and we believe that these brokers have the right tools and platforms that will help you trade IAG and other stocks successfully.
Should I Invest in IAG Stock?
Although still in survival mode, IAG might represent a great investment opportunity this year. Given its history and numerous subsidiaries, it will take its leading position among airline companies once the pandemic-related restrictions are entirely eliminated. Let’s find out more about its investment potential, what types of investors should add this company to their portfolio, and how much you should invest in IAG.
IAG Stock Investment Potential
Fortunately, despite the restrictions in 2020-2021, the company still has some cash (€5.8 billion) to burn in another possibly unprofitable year. With an uptick in travel activity, this year could offer it a less depressing bottom line.
In terms of annual growth, IAG appreciated approximately at a rate of 6.58% in the past ten years, which can help forecast its investment potential. However, as mentioned, its fate depends on how quickly the industry recovers.
What Kinds of Investors Should Include IAG in Their Portfolios?
Investors considering adding IAG to their portfolio must be prepared to take in the uncertainty caused by the present health crisis. IAG is still a great business with many profitable subsidiaries under its belt. However, it needs to survive this present obstacle for investors to see their investment pay off. If the situation does turn brighter, the IAG share price may offer enormous growth once the stock starts taking off.
How Much Should I Invest in IAG
Now that you have a good idea about IAG as a company and its investment growth potential, you'll be able to decide how much of your funds should be invested in it. Of course, this decision is entirely based on your preference, objectives, and investment strategy.
Essentially, you should take into account your risk profile. In other words, you need to consider investing risk capital and even be ready to wait for a while until you enjoy the returns. Despite this, the airline industry is an excellent addition to a diversified portfolio.
How to Buy Shares in IAG Stock?
There are two main ways of accessing IAG stocks. You can opt for a brokerage firm that allows you to access the financial markets and buy IAG shares, along with other financial assets. The second method is known as a DSPP. The next sections explore both ways, so you can decide which one is suitable for you.
Buy IAG Shares Using a Broker
As mentioned earlier, a brokerage account is your ticket to trading IAG stocks. So, when you initiate the process of opening an account, you'll typically be required to submit an application form along with supporting documents. Upon receiving your application, brokers will usually need a few days to approve it.
When your account is approved, the next step is to fund it. Brokers have several funding methods, so you only need to choose the one that's suitable for you. In general, you will be able to choose from wire transfers, account transfers, electronic bank deposits, and more.
Your deposit processing time varies from a few minutes to a couple of days, depending on your chosen method. For instance, if you want the funds in your account instantly, you can opt for electronic bank transfers. Once your account is funded, you are ready to place your first IAG trade.
Buy IAG Shares With a Direct Stock Purchase Plan (DSPP)
A Direct Stock Purchase Plan or DSPP is an alternative way to purchase shares. This method enables you to buy shares directly from the company without a broker. With this method, you don't incur a fee per transaction. Instead, you need to pay an initial setup charge and invest a certain amount of money.
IAG offers a Dividend Reinvestment Plan, wherein the cash dividends it receives from IAG are invested directly into new shares. If you're interested in this, you have to send an online application to IAG.
Frequently Asked Questions
Many analysts maintain their buy ratings for this stock as it is highly likely to bounce back to its growth rate in 2021. This may be linked to the company’s leading position in this competitive industry.
IAG was a consistently profitable business, but last year's pandemic travel restrictions caused it to report its first net loss. Despite this, many investors believe that the company will return to profit-making once restrictions are lifted.
Yes, it is possible to profit from trading IAG stock due to its sufficient short-term trading volume and volatility. At the same time, long-term investors could consider IAG stocks if they believe in its ability to retain the market share in the post-pandemic period.
IAG stock can be traded on any platform that you find easy to understand and use. As a result, it depends on your knowledge, experience, and investment goals.
IAG's trading hours are between 3 A.M. to 11:30 A.M. (ET).
IAG is listed on Bolsa de Madrid (BMAD) and the London Stock Exchange (LSE).