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Buy Tesco Stocks: How to Invest in TSCO Shares

Tesco is known as the leading UK supermarket in terms of market share and its net profits in 2020 are forcasted to be at £1.7 billion. If you want to buy Tesco stocks, make sure to check out first our comprehensive analysis and tutorial below.
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Author: Kane Pepi
Last Updated: 27 March 2020

Tesco PLC is a multinational supermarket chain with its headquarters in Welwyn Garden City. The company is behind thousands of stores both domestically and internationally, and it still holds the largest market share in the UK. Tesco has since expanded into other revenue streams – such as insurance, clothes, mobile telecommunications, and home deliveries – subsequently allowing the firm to diversify out of its core grocery offering.

It is important to note that Tesco has had a somewhat turbulent time in the financial markets since 2014. This was in response to the infamous accounting scandal that saw national regulators enforce monetary penalties on the chain. With that said, Tesco shares have been in an upward trajectory since 2016, so you still have a chance to buy stocks on the cheap.

As such, if you’re wondering how to buy Tesco stocks today, be sure to read our in-depth guide which will give you a step-by-step overview of how to purchase shares in the company, the best stock brokers to do so and a full breakdown of whether or not Tesco stocks represent good value.

Best U.S. Platform to Buy Tesco Stocks

We’ve scoured the web to find the best stock broker in the U.S. for investing in Tesco and found Stash Invest to offer the best platform, lowest fees and most appealing bonus. Click the table below and get started with $5 only today.

Stash Invest - Invest in stocks with just $5

RATING

  • U.S. friendly stock broker
  • Fractional shares available - invest in stocks with just $5
  • Fees as low as $1 per month for basic banking and personal investing
  • Build a portfolio of stocks and ETFs for free
  • $50 bonus available when you deposit $300 within 30 days

Best Platform to Buy Tesco Shares outside the U.S.

Based in a country other than the US? If so, we would suggest checking out the merits of Plus500. The UK-based forex and CFD platform hosts thousands of shares – including that of Tesco. You won’t be accustomed to any fees or commissions – other than the spread.

Plus500 - No.1 stock broker for non-U.S. customers

RATING

Plus500 Broker
  • Lowest spreads in the market
  • No commissions on trades
  • Listed on the stock exchange and FCA & CySEC regulated
  • Advanced stock analysis tools including historical charts, news, and realtime prices
  • Over 2,000 shares to buy
Plus500 Broker
75% of retail investors lose money when trading CFDs with this provider.

How to Buy Tesco Stocks in the U.S. 

The best U.S. stock broker for investing in Tesco is the broker Stash Invest. Stash Invest is a banking and micro-investing stock trading app with 4 million + users available for Android and iOS users. Residents in the United States who are at least 18 years old can open an account and invest as little as $5. Its users only need to pay $1 per month for using its investing and banking services.

Step 1: Create your Stash Invest account

You’ll need to create your account by entering your email address and password after clicking the “Get Started” button on its website. If you want to download the Stash Invest app, go to the App Store and install it.

Step 2: Fill out your profile

You’ll need to provide your basic information by answering some questions. By getting your answers to these questions, Stash Invest will be able to better guide you in making investment decisions. Remember to be as honest as possible when answering these questions.

Step 3: Check your investment options

Based on your answers, Stash Invest will give you investment options that are aligned to your risk tolerance. Your risk tolerance can either classed as be conservative, moderate or aggressive. Moreover, instead of presenting you with names such as ticker symbols and ETFs, you’ll see easy to understand “themes” that you can relate to.

Step 4: Fund your account

Connect your bank account that you want to use to deposit money on Stash Invest. This will also be the bank account that will be used to withdraw your investments. Take note that it takes two to three days to deposit money to Stash Invest.

Step 5: KYC & Verification

Verify your identity by providing the needed documents then create a pin number with 4 digits.

Step 6: Buy Tesco stocks

Search for the Tesco stock, enter the amount you want to invest then click the “Buy” button.

  Visit Stash Invest

How to Buy Tesco Stocks outside the U.S.

If you're based outside of the US and you want to buy Tesco stocks today, it might be worth using Plus500. Not only is the broker regulated by the UK's Financial Conduct Authority (FCA), but its parent company is listed on the London Stock Exchange. As such, Plus500 has one of the best reputations in the online stock trading space.

With that said, we've outlined the step-by-step process you will need to take with Plus500 if you want to buy Tesco stocks.

Step 1: Open an Account With Plus500

To get the ball rolling, you will need to head over to the Plus500 website and open an account. The broker will ask you a range of questions pertaining to your personal and financial standing. For example, you'll need to enter your first and last name, home address, date of birth, and contact details. Make sure the information is correct, as you'll be asked to verify it in the form of documentation.

To complete the verification process - which is a requirement with all regulated brokers, you will need to upload a copy of your government-issued ID. This needs to be a passport or driver's license. Depending on where you live, Plus500 might also ask for a proof of address. If they do, you'll need to upload a recent copy of a bank statement or utility bill.

Step 2: Fund your Plus500 Account

Once you've opened your Plus 50o account and verified your identity, you will then need to deposit some funds. The broker offers heaps of payment methods to choose from. This includes a debit/credit card, bank transfer, or an e-wallet PayPal.

Take note, the minimum deposit amount at Plus500 is $/€/£100. Apart from a bank account transfer - which can take 3-5 working days to arrive, deposits at Plus500 are usually instant.

Step 3: Consider Tesco CFDs

Now that you have funded your Plus500 account, you are now ready to buy some Tesco stocks. It is important to note that Plus500 allows you to buy and sell Tesco stocks in the form of a CFD (Contract-for-Difference). This means that you are merely speculating on the future price of Tesco, so you won't have ownership of the stocks themselves.

As a result, you won't be accustomed to any dividends or investor rights. On the flip side, going the CFD route allows you to purchase Tesco stocks quickly and cheaply. Moreover - unlike traditional stocks and shares, CFDs allow you to go 'short' on Tesco, meaning that you can profit when the value of its shares go down.

Step 4: Buy Tesco Stocks at Plus500

If you're happy to invest in Tesco via a CFD, you will now need to head over to the main trading arena. To get there, enter 'TESCO' into the search box, and decide whether you want to go long (buy) or short (sell). You then need to enter the amount of shares that you wish to trade.

Finally, you then need to decide whether you want to place a limit or market order. If opting for the former, this means that you need to enter the price that you want the trade executed at. If you want to take the next available price, go with a market order.

  Visit Plus500

Should you Invest in Tesco?

Whether or not you decide to invest in Tesco will be determined by your long-term investment goals. On the one hand, the company still dominates the UK groceries space and thus - continues to retain its spot as the number one supermarket in terms of market share.

This is largely due to its re-transformation program that has sought to reduce its reliance on mega-stores, and instead, focus on more profitable Tesco Express store. Not only do such stores allow Tesco to keep operating costs to a minimum, but it can typically charge more on core products. This has the desired effect of increasing those already-thin profit margins.

Crucially, it appears that the infamous accounting scandal that broke in 2014 is finally becoming a distant memory. Although the stock price of Tesco is yet to recover to its previous all-time high, shares have been on an upward trajectory since 2016 nonetheless. This is great news for investors that kept faith in the supermarket giant.

Pros of Investing in Tesco Stocks

✔️ Tesco Still Holds the Largest UK Market Share
Although Tesco now has an international presence that spans multiple regions, its core marketplace is still the UK. Crucially, although Tesco has slowly by surely been losing its market share to low-cost rivals like Aldi and Lidl, it is still the largest supermarket domestically. If Tesco is able to retain these feat in the long-run, we could see the upward share price trajectory continue. (Statista).
✔️ Profits in 2021 Could Double Pre-2014 Levels

Although shareholders have gone through a turbulent time since the accounting scandal broker in 2014, it appears that management have finally turned things around. Net profits in 2020 are forcasted at £1.7 billion, rising to £1.8 the following year. This is highly notable, not least because profits in 2014 stood at £974 million. As a result, if Tesco meets its rather ambition 2021 targets, this would represent a profit figure that nearly doubles 2014 levels.

✔️ Tesco Dvidiends Could Soon Surpass the 4% Mark
Dividends should play a role in all long-term investment goals, not least because they act as a defence again volatile share price movements. In this respect, your Tesco investment is no different. At the time of writing, Tesco's most recent dividend in late 2019 amounts to 2.6% of the current share price. While this is nothing to write home about, city analysts believe that this is likely to increase by some distance moving into 2021. In fact, it is rumoured that 2021 will see Tesco shareholders awarded with an annualized dividend of 4.1%, which is somewhat juicy.

Cons of Investing in Tesco

Competition From Low-Cost Rivals is Increasing

Although Tesco still retains its title as the leading UK supermarket in terms of market share, it is important to note that the likes of Aldi and Lidle are gaining traction year-on-year. These low-cost supermarkets offer UK consumers an alternative to the status quo - with such firms looking to supply high-quality food for those on a budget.

Aldi and Lidl remain a threat and it’s increasingly apparent that Walmart is looking to offload Asda. A sale could breathe new life into the brand – potentially sparking another price war and undoing some of the good work on margins. Hargreaves Lansdown Analysis.

With profit margins in the UK supermarket space already wafer-thing, Tesco can only go so low before it reaches the point of saturation. Once again, the chain is further hindered by its costly mega-stores, which is why it is refocusing its target on smaller Tesco Express locations.

Overseas Stores Underperforming

It is also a concern that a number of overseas locations are showing signs of reduced revenue growth. For example, Tesco saw a 10.3% decline in sales in the Central European region. This includes stores based in Slovakia, Hungary, and the Czech Republic. Over in Asia, sales also fell - albeit, nowhere near as much as Central Europe. Like-for-Like sales in Asia dropped by 1.6%, which has lead Tesco management to consider exiting both Malaysia and Thailand..

Tesco Shares Still Short of Prior All-Time Highs

On the one hand, it is notable that Tesco shares have been on the rise since 2016, subsequently rewarding shareholders that kept faith in the re-transformation program. However, it is also important to recognize that the value Tesco shares are still far short of its previous all-time high. Back in 2014, Tesco shares peask at 468p. At the time of writing this stands at just 246p, illustrating an all-time high shortfall of 49%.

Although it is concerning that Tesco shares are worth significantly less than their previous all-time high, this could also present an excellent buying opportunity. With that being said, always per your own in-depth research prior to making an investment - and never buy shares off the back of somebody else's advice.

Conclusion

In summary, if you've read our guide from start to finish, you should now have a firm understanding of whether or not Tesco stocks are right for your long-term investment goals. On the one hand, it appears that the re-transformation program being implemented by Tesco management is fully beginning to show signs of success. In fact, not only is Tesco still the largest UK supermarket for market share, but its share price has been on an upward trajectory since late 2016.

On the flip side, Tesco stocks are still worth significantly less than they were before the accounting scandal broke in 2014. Although it is concerning that the company has not been able to recover its prior all-time highs, this also means that you have the potential to buy Tesco shares at a discount. In this respect, we've shown you how you can buy Tesco stocks at the click of a button.

If you're in the US, the easiest way to do this is via regulated platform Stash Invest. Alternatively, if you're based outside of the US, then it might be worth considering the merits of FCA-regulated broker Plus500. Either way, just make sure that you perform independent research on Tesco prior to buying any stocks - and never make a purchase on the back of somebody else's advice.

Plus500 - No.1 stock broker for non-U.S. customers

RATING

Plus500 Broker
  • Lowest spreads in the market
  • No commissions on trades
  • Listed on the stock exchange and FCA & CySEC regulated
  • Advanced stock analysis tools including historical charts, news, and realtime prices
  • Over 2,000 shares to buy
Plus500 Broker
75% of retail investors lose money when trading CFDs with this provider.

FAQs

What payment methods can I use to buy Tesco stocks?

This depends on the broker that you decide to use. In most cases, you'll be able to deposit funds with a debit/credit or bank transfer. Some brokers even allow you to fund your account with an e-wallet like PayPal.

What is the minimum number of Tesco shares that I can buy online?

How much profit is Tesco forecasted to make in the coming years?

At the time of writing, Tesco is predicted to make £1.7 billion and £1.8 billion in 2020 and 2021, respectively. If it reaches its 2021 target, this could represent an increase of nearly 100% over 2014 levels.

How do I sell my Tesco stocks?

Will I get dividends if I buy Tesco stocks?

If you buy Tesco shares from a traditional stock broker, you will be entitled to dividends and investor rights. However, if you buy Tesco stocks in the form of CFDs, you won't be entitled to dividends as you do not own the underlying asset.

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Remember, all trading carries risk. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
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Kane holds academic qualifications in the finance and financial investigation fields. With a passion for all-things finance, he currently writes for a number of publications in the online space.

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