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Originally famous for its high-end cars, Rolls-Royce has ascended to global prominence as an engineering powerhouse responsible for creating, producing, and supplying power systems for industries such as aviation, defense, and beyond.
Keep reading as we analyze the most important facts about the aerospace and defense behemoth, explain how to buy Rolls-Royce stock, and provide an overview of the most reliable brokers to use.
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What is Rolls-Royce?
Rolls-Royce Holdings plc (LSE: RR) is a British multinational company in the aerospace and defense sector. Established in 2011, Rolls-Royce Holdings owns Rolls-Royce, a business originally founded in 1904. While Rolls-Royce is probably best known for its luxury automobiles, the car business is actually an entirely separate entity owned by BMW. Instead, Rolls-Royce Holdings is primarily involved in the design, production, and distribution of power systems for the aviation industry and other sectors.
The company also stands as the world’s second-largest manufacturer of turbofans, i.e., aircraft engines (following General Electric), and holds substantial operations in the marine propulsion and energy sectors.
Rolls-Royce is listed on the London Stock Exchange (LSE) under the ticker RR and forms part of the FTSE 100 Index. As of early January 2024, its market capitalization had reached £25,22 billion on the London Stock Exchange.
Where to buy Rolls-Royce stock?
Thanks to an abundance of online brokers, like eToro, accessing the stock market has never been easier or more cost-effective. In fact, buying Rolls-Royce stock, and investing in the stock market in general, involves just a few straightforward steps.
Remember, selecting the appropriate broker that suits your unique needs, including your investment objectives, educational resources, and trading approach, is key to ensuring a smooth trading experience.
Now let’s dive into the step-by-step process.
How to buy Rolls-Royce stock? Step-by-step process
As a publicly-traded company, investors can purchase shares of Rolls-Royce through a regular retail broker. The subsequent section will offer an in-depth overview of the step-by-step process as well as suggestions for platforms to use.
Step 1: Choose a broker
As mentioned above, to buy Rolls-Royce stock online, you’ll need a brokerage account. Your ideal platform should match your investment style (long-term buy-and-hold strategy or active day trading) and needs (e.g., whether you want to trade more advanced financial products like options). When assessing brokers, here are some crucial characteristics to take into account:
- Fees: Brokerage fees are a type of fee collected by brokers to execute your transactions or provide specialized services. Fortunately, today, the vast majority of online brokers offer commission-free stock and exchange-traded funds (ETF) trading;
- Security: Choose a trustworthy broker by ensuring it is fully authorized and regulated by the Financial Conduct Authority (FCA);
- Trading tools: Some brokers offer fully customizable platforms with comprehensive analysis tools or access to additional data for an extra cost. It’s typically a good idea to look for a user-friendly platform with a competitive fee structure if you are new to stock trading. A dedicated section with investing tips and tricks is a bonus;
- Access to market data: Look for a platform that offers solid market research and reporting tools to help you trade confidently with updated data;
- Fractional stock trading: Fractional shares enable investors to buy stocks or ETFs by the dollar amount, which is particularly valuable for investors with limited capital and the desire to build a diversified portfolio or investors looking to set up a dollar-cost averaging (DCA) strategy.
To securely invest in Rolls-Royce and buy RR stock, consider these brokers:
1. eToro
- Commission-free stock trading;
- 2,000+ stocks from 17 exchanges;
- Fractional shares available;
- User-friendly platform.
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- Commission-free stock trading;
- Global stock-trading on 90+ market centers;
- Fractional shares available;
- Extra income on fully paid shares;
- Lowest financing rates for margin accounts in the industry;
- No account minimum.
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Step 2: Fund your account
After selecting a broker and registering an account with them, the next step is to fund your account. A variety of deposit methods will typically be available to you, including linking a bank account directly, using a debit, credit, or prepaid card, or opting for a third-party payment service.
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Step 3: Research the company
The best starting point for researching a company is to examine its public filings with the FCA. As a publicly listed company, Rolls-Royce’s annual earnings reports, financial results, shareholder presentations as well as relevant regulatory updates can be obtained directly from its investor relations section.
These reports offer insight into Rolls-Royce’s financial health and future strategies. They also provide information on any potential obstacles that the company or the entire industry might be encountering, such as supply chain disruptions, the continuing fallout from the COVID-19 pandemic, as well as government regulations and policies affecting the aerospace industry.
Step 4: Decide how much you want to invest
You are set on buying Rolls-Royce stock, but the big question remains: how much should you invest?
How much you invest depends on several aspects, such as the current stock price and the number of shares you wish to acquire. If the stock’s price is out of reach, don’t fret – consider fractional shares. With fractional shares, you can purchase a portion of a share at a cost that aligns with your budget.
However, in the inherently volatile stock market – results are never guaranteed. As a result, only invest what you are willing to lose and carefully evaluate the level of risk you’re prepared to take on.
Step 5: Place your order and invest in RR
After deciding on the number of shares or the cash amount you want to allocate to Rolls-Royce, it’s time to place your order. Simply log into your brokerage account and enter the ticker RR in the search bar.
You can choose between two execution options:
- Market order: An order to purchase the stock at the current market price, which usually fulfiles instantly, subject to availability;
- Limit order: An order activated once the stock hits your determined price.
Invest in RR with index funds
Step 6: Monitor your investment
While a passive management style may be appropriate for a diversified ETF portfolio, investing in individual stocks such as Rolls-Royce requires a more proactive strategy. This involves periodically monitoring the company’s performance by reviewing press releases, key company metrics such as revenue and debt, the state of the industry, and the market as a whole, as well as consumer trends. Then, based on this information and depending on your financial objectives, reassess whether it’s best to hold onto the stock or sell it.
Bonus step: Track the performance of market competitors
Monitoring competitors’ performance in the aerospace, power systems, defense, and electric aviation industries, such as General Electric (NYSE: GE), Honeywell International (NASDAQ: HON), and Bombardier (TSX: BBD.B), can serve as valuable points of comparison.
Rolls-Royce stock price today
Should I buy Rolls-Royce stock?
Whether Rolls-Royce stock is the right choice for your investment portfolio depends on your risk tolerance and investment goals.
In addition to examining the company fundamentals, you can use technical analysis to evaluate the Rolls-Royce stock and identify trading opportunities in price trends and patterns seen on charts.
The gauge displayed here represents the real-time technical analysis overview of Rolls-Royce for your specified timeframe (in this case, one day). It can simplify trading decisions (subject to your proficiency in technical analysis) by demonstrating the real-time recommendations of popular technical indicators such as moving averages and oscillators.
Disclaimer: TradingView does not recommend trading financial instruments based exclusively on the advice of the Technical Rating indicator. These recommendations cannot predict future movements and are meant as assistance for spotting potentially favorable buy/sell conditions if this is consistent with their strategy.
Common mistakes to avoid when investing in the stock market
Some of the most common mistakes to avoid when investing in the stock market include:
- Not conducting thorough research on the stock;
- Lacking well-defined financial goals;
- Trying to time the market;
- Not diversifying your investments across a variety of sectors or asset types;
- Allowing your emotions to dictate your investment decisions.
Have a look at our guide on the most common investing mistakes for a more in-depth overview as well as advice on how to steer clear of such mishaps.
How to sell Rolls-Royce stock?
You can sell your Rolls-Royce stock if you see the company performing differently than expected.
To do this, simply:
- Log on to your broker account;
- Navigate to the stock’s detail page;
- Input the number of shares or the cash amount you want to offload;
- Tap sell.
Pros and cons of buying Rolls-Royce stock
Before you invest in RR, take into account both the pros and cons of Rolls-Royce’s business:
Pros
- Possibly undervalued: The current (as of early 2024) share price is seemingly low compared to its historical performance, providing a potential opportunity for investors to buy in at a lower price;
- Diversified business: The company operates in several industries, including aerospace, defense, and power systems, insulating the company from downturns in any single sector;
- Long-standing reputation and market presence: Rolls-Royce has a strong brand built over many years, contributing to the company’s resilience, even in challenging market conditions;
- Strong focus on innovation: Rolls-Royce continues to invest in new technologies and strongly focuses on research and development, which could contribute to long-term growth;
- Global clientele: The company has a diversified global customer base, including corporations and governments.
Cons
- Heavily impacted by the global economy: The company’s performance is heavily tied to the state of the global economy. Factors such as the COVID-19 pandemic, which hit the aviation industry hard, can significantly impact the company’s revenues.
- Fierce competition: Rolls-Royce operates in highly competitive markets dominated by a few large players;
- Regulatory risks: Rolls-Royce operates in industries subject to strict (and constantly in flux) regulation, particularly pertaining to the environment. Changes in these regulations or failure to comply with them can affect the company’s performance;
- No dividends: Rolls-Royce had a solid track record of paying dividends prior to the pandemic but had to cease payments in 2020 to protect its balance sheet. While the company aims to pay dividends again in the future, there are no guarantees.
In conclusion
In short, these are the steps to buying Rolls-Royce stock:
- Choose an online broker;
- Register and fund your account;
- Research the company;
- Decide how much you want to invest;
- Buy Rolls-Royce stock;
- Periodically monitor your stake in the company.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about Rolls-Royce
How to buy Rolls-Royce stock?
Rolls-Royce is a public company, and its stock is available on the London Stock Exchange under the ticker RR. This means that you can buy shares of the company through your brokerage account.
Where to buy Rolls-Royce stock?
You can buy shares of Rolls-Royce from various online brokers such as eToro and Interactive Brokers (IBKR).
Is Rolls-Royce a good stock to buy?
Whether Rolls-Royce is a good stock to buy should be based on your risk tolerance, portfolio size, financial goals, and market experience. So always conduct your due diligence before trading. Also, note that past performance doesn’t guarantee future returns.
Highly Rated Stock Trading & Investing Platform
-
Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.
-
0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
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Copy top-performing traders in real time, automatically.
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eToro USA is registered with FINRA for securities trading.
