How to Buy Shell Shares UK [2024] | Invest in SHEL

As we sail deeper into the era of the climate crisis, the decision to invest in fossil fuel companies like Shell presents a momentous paradox. On the one hand, a surging global consciousness about environmental sustainability prompts us to shy away from businesses inherently linked to carbon emissions. On the flip side, the reality remains that non-renewable energy sources continue to meet much of the world’s energy needs.

So, whether you’re an environmentally-conscious investor grappling with the ethical aspects of investing in the fossil fuel industry or simply someone considering the future profitability of such an investment, join us as we analyse the most important facts about the oil conglomerate, explain how to buy Shell shares in the UK, and provide an overview of the most reliable brokers to use.

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What is Shell?

Shell plc (LSE: SHEL) is a British multinational oil and gas conglomerate jeadquartered in London, England. Established in 1890 as the Royal Dutch Petroleum Co., Shell is involved and operating in every aspect of the oil and gas sector, including exploration, production, refining, transportation, distribution and marketing, petrochemicals, power generation, and trading. The company controls all aspects of its supply chain as a vertically integrated enterprise.

Shell is one of the leading gas and oil companies in the world and in 2022, it reported revenues of $344.247 billion, a substantial recovery from the downturn in 2020 brought about by the economic and mobility restrictions emplaced to contain the coronavirus pandemic.

With operations spreading across more than 70 countries, Shell organises its business into the following segments: upstream, integrated gas, renewables & energy solutions, and downstream (consisting of chemicals and products). Additionally, the company’s projects & technology division handles the execution of major projects and spearheads research and innovation efforts.

Shell is a publically traded company with a primary listing on the London Stock Exchange (LSE) under the ticker symbol SHEL, as well as secondary listings on Euronext Amsterdam and the New York Stock Exchange (NYSE). It is also a component of the FTSE 100.

Note

A 2019 ranking by The Guardian revealed that Shell, taking into account its own emissions as well as those from the fossil fuels it sells, was the ninth-largest corporate emitter of greenhouse gases for the period from 1988 to 2015.

Where to buy Shell shares?

Thanks to the abundance of online brokers, such as eToro, acquiring shares in your preferred companies is as straightforward as making a takeout order. In fact, buying Shell shares, and investing in stocks in the UK at large, only requires a few simple steps.

However, selecting a broker that fits your unique needs, including your investment objectives and trading approach, is vital for guaranteeing a smooth trading experience.

Keeping these considerations in mind, let’s dissect the process step-by-step.

How to buy Shell shares? Step-by-step process

As a publicly-traded company, investors can purchase shares of Shell through a regular retail broker. The following section will offer an in-depth overview of the step-by-step process as well as our recommendation for specific platforms to use.

Step 1: Choose a broker

As mentioned above, to buy Shell shares 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 wish to trade more advanced financial vehicles like options). When assessing brokers, here are some crucial characteristics to consider:

Fees: Brokerage fees are a type of fee collected by brokers to execute your transactions or provide specialised 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 authorised and regulated by the Financial Conduct Authority (FCA);
Trading tools: Active traders may prefer brokerage accounts with all the bells and whistles. Some brokers offer fully customisable platforms with comprehensive analysis tools or access to additional data for an extra cost. If such additions are unnecessary for your purposes, avoid paying extra for them. It’s typically a good idea to look for a user-friendly platform with a competitive fee structure. 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;
Fractional stock trading: Fractional shares enable investors to buy stocks or ETFs by the sterling amount. This is particularly valuable for investors with limited capital and the desire to build a diversified portfolio. It’s also for investors looking to set up a dollar-cost averaging (DCA) strategy.

Top picks

To securely invest in Shell and buy SHEL stock, consider these brokers:

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2. Interactive Brokers (IBKR)

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Step 2: Fund your account

Once you’ve decided on a broker and set up an account, you can fund your account. Various deposit methods will typically be available, including linking a bank account directly, using a debit, credit, or prepaid card, or opting for a third-party payment service.

Remember, it can sometimes take up to three days for the money to reach your account.

Step 3: Research the company

As a publically traded company, Shell’s annual financial reports, shareholder presentations, dividend details, environmental, social, and governance (ESG) strategies, along with the latest press releases, can be accessed directly through its investor relations section.

These reports offer invaluable insights into Shell’s financial well-being and future strategies, as well as potential roadblocks that the company and the broader industry may face, from sustainability commitments and the mounting pressures of regulatory scrutiny to the lingering effects of the pandemic.

Step 4: Decide how much you want to invest

Next, you must determine how much to invest, and this depends on various factors, such as the current stock price and the number of shares you wish to acquire. If the stock’s price is financially out of reach, don’t panic – consider fractional shares. With fractional shares, you can purchase a portion of a share at the exact cost that matches your budget.

Remember, however, that given the inherent volatility of the stock market – results are never guaranteed. Therefore, 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 buy SHEL shares

Once you’ve determined the number of shares or the monetary value of shares you want to buy, you’re ready to place your order. You can do this by logging into your brokerage account and searching for the ticker SHEL.

You’ll have two execution options:

Market order: An order to buy shares at the current market price, executed instantly (subject to availability);
Limit order: An order activated only after the stock hits your selected price. For example, if you wish to buy SHEL shares at £2,300 or below, you’d set the limit price at £2,300. The order will then be fulfilled once the share price falls to £2,300 or lower.

Invest in SHEL with index funds

To mitigate the effects of market volatility, you should diversify your investments across different asset classes, industries, and sectors. The simplest way is to invest in ETFs, which provide broad market exposure.

Step 6: Monitor your investment

Monitoring your investment in Shell, like any other investment, involves a combination of various strategies. Here are a few recommended practices:

Periodic portfolio reviews: Look at how Shell’s stock is performing in comparison to the rest of your portfolio and consider any rebalancing;
Staying informed about company updates: You can do this by checking the same annual reports you used to conduct your preliminary research. Also, stay updated on company news, such as changes in leadership, new ventures, and significant events;
Understanding the sector and market trends: The performance of oil and gas companies like Shell is in close relation to factors such as global oil prices, regulatory policies, and technological advancements in the energy sector. Stay informed about these broader trends;
Reviewing dividend payments: If you’re an income-focused investor, keep an eye on Shell’s dividend payments. Changes in their dividend policy could affect your investment income;
Monitoring ESG factors: Keep a close watch on Shell’s ESG initiatives, as changes can impact the company’s reputation and stock performance.

While these methods can assist you in managing your portfolio, it’s essential to remember that all investments in the stock market carry inherent risks, and there are no guarantees.

Bonus step: Track the performance of market competitors

Observing the performance of competitor companies within the oil and gas industry, such as BP (LSE: BP), Chevron Corp (NYSE: CVX), Enbridge (TSX: ENB), and Exxon Mobil Corp (NYSE: XOM), can provide valuable points of reference for comparison.

Should I buy Shell shares?

Whether investing in Shell is the right choice for your investment portfolio depends on your risk tolerance and investment goals.

Beyond examining the fundamental aspects of the company, you can use technical analysis to evaluate the stock’s performance and identify trading opportunities through price trends and chart patterns.

This gauge here offers a real-time technical analysis summary of the SHEL stock for a chosen timeframe, in this instance, one day. If you’re well-versed in technical analysis, this tool can streamline trading decisions by showing real-time recommendations from well-known 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 favourable 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 company;
Not having clear financial objectives;
Trying to time the market;
Neglecting to diversify your investments across a range of sectors or asset classes;
Letting your emotions guide your investment decisions.

For a more detailed discussion and guidance on how to avert these missteps, refer to our guide on the most common investing mistakes.

How to sell Shell shares?

If you see Shell performing differently than expected or you’ve reached your targeted financial goal, you may decide to sell your shares.

To do this, just log into your brokerage account, head over to Shell’s detail page, enter the number of shares or the monetary amount you wish to unload, and click on sell.

Pros and cons of buying Shell shares

The tireless demand for energy makes the oil and gas sector an enticing arena for those seeking high-yield investment prospects. Nonetheless, like any stock market endeavour, this industry, too, presents its risks.

To gauge whether Shell and, by extension, oil and gas stocks constitute robust long-term investments worthy of a spot in your portfolio, let’s delve into the pros of cons:

Pros

Fossil fuels are the most widely used energy sources: For the foreseeable future, oil will continue to be a crucial cog in the global energy machinery. Moreover, despite its projected diminishing share in the overall energy market, demand for oil is anticipated to persist in growth until at least 2040;
Size and market position: Shell is one of the largest and most established companies in the world, particularly in the oil and gas sector;
Income-generating: Standard for many oil and gas stocks, Shell provides a handsome dividend, with a 5-year average yield of 3.88% as of January 3, 2024;
Diversified business: Shell operates in different segments of the energy sector, from exploration and production to refining and marketing, providing some degree of protection from fluctuations in any one segment;
Transition to green energy: Shell is investing in renewable energy and other clean technologies, likely to benefit its stock price as the world moves towards cleaner energy sources.

Cons

Cyclical nature: The oil and gas industry is renowned for its cyclicality, characterised by alternating periods of booms and busts;
Price volatility: Stocks in the oil and gas sector are often more volatile than the general market due to their sensitivity to fluctuations in the supply and demand of the underlying commodities. For instance, the oil and gas stocks nosedived from mid-2014 to early-2016 in response to an oversupply of crude oil and natural gas;
Dividend cut risk: If the company can’t generate enough revenue to maintain shareholder payments, dividends may be cut;
Operational hazards: Infrequent but potentially catastrophic incidents, like oil spills, can cause significant environmental harm and incite media criticism and political backlash. This could seriously damage the company’s reputation and cause a sharp decline in its stock price;
Legal and regulatory risks: Shell, as a company in the oil and gas sector, is susceptible to numerous legal and regulatory risks, including possible changes in climate and emissions laws;
Environmental impacts: The combustion of fossil fuels releases considerable amounts of carbon dioxide into the atmosphere, contributing to climate change. As governments intensify decarbonisation efforts, this could result in diminishing demand for oil and gas in future decades;
Greenwashing allegations: According to the non-profit organisation Global Witness, Shell has inaccurately exaggerated its expenditure on renewable energy. The group contends that only 1.5% of Shell’s capital expenditure has been utilised to develop actual renewables, contrary to Shell’s reported 12%. Such misleading environmental claims can result in fines from regulatory bodies and could negatively impact the company’s stock price.

Remember

Conduct your own in-depth research and ensure robust risk management measures are in place before diving into the market. Ultimately, investing aims to make money over the long term, so investors should focus on where companies will be ten years from now rather than short-term fluctuations in the stock market.

In conclusion

Shell, a blue chip company and one of the most prominent players in the global energy sector offers the potential for stable returns and attractive dividends.

Unfortunately, however, stocks in the oil and gas industry typically exhibit greater volatility than the broader market due to changes in the supply and demand of the underlying commodities. Furthermore, the sector is notably prone to legal and regulatory challenges, often resulting from accidents such as oil spills.

Finally, as global energy strategies shift towards more sustainable alternatives, the success of Shell in adapting to this change will be a pivotal factor in its long-term prosperity.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

FAQs about buying Shell shares