If you’re looking to create a diversified portfolio of UK shares, you might be thinking about investing in Lloyds. Although the UK bank is worth just a fraction of its pre-2008 financial crisis highs, some would argue that you can now purchase its shares at a heavily discounted price.
In this article, not only do we give you a handy step-by-step guide on how you can buy Lloyds shares today, but we also discuss the best two online brokers to do this with.
Table of Contents
How to Buy Lloyds Shares in 3 Quick Steps
Don’t have time to read our guide in full? Below you’ll see three quick steps that you need to follow to buy Lloyds shares right now.
Step 1: Create an Account
You'll want to choose a broker that gives you access to shares listed on the LSE.
Step 2: Deposit Funds
Deposit funds in a matter of seconds. Choose from a debit/credit card, e-wallet, or bank wire.
Step 3: Buy Lloyds Stocks
Search for Lloyds stocks, specify the number of shares you want to purchase, and click 'buy'.
Where to Buy Lloyds Shares
As Lloyds is listed on the London Stock Exchange, you’ll need to use a stock trading site that gives you access to the UK markets. Although there are heaps to choose from in the online space, we have narrowed our list of recommended stock brokers down to just two. Both of our top-rated sites allow you to deposit and withdraw funds with a debit/credit card, fees and commissions are low, and most importantly they both hold licenses with the FCA, ASIC, and CySEC.
1. eToro – Best Stock Broker for Worldwide Customers
eToro is by far the easiest way to buy Lloyds shares. You simply need to open an account, deposit funds, and then choose how many shares you wish to buy. In fact, there is no requirement to buy whole shares at eToro, as the platform supports fractional ownership. In terms of getting money into your account, minimum deposits start at $200. You can choose from a debit/credit card, e-wallet, bank transfer, or Western Union.
All deposit methods are free, although withdrawals do cost $5 per transaction. One of the best features at eToro is that it does not charge any trading commissions when buying stocks. As such, the only fee that you need to consider is the spread. If you’re planning to add other companies to your shares portfolio, eToro hosts more than 800 equities. This covers companies listed in the UK, US, Canada, and Australia, plus many others.
eToro is suited to the newbie trader, which is evident in its Copy Trading offering. This allows you to choose an investor that you like the look of, and then copy their stock trades like-for-like. Finally, eToro is heavily regulated, which includes licenses from bodies in the UK, Australia, and Cyprus. This ensures that you are able to trade stocks in a safe and secure environment.
- Catered to newbie traders
- 0% commission on ETFs and stocks
- Supports heaps of everyday payment methods
- Minimum withdrawal of $30
- High spreads
- MT4/5 not available
2. Plus500 – Great for Lloyd Share CFD trading
Plus500 presents you with the right platform for buying and selling Lloyds stocks CFDs. Trading stock CFDs means that you don’t own the underlying share and, therefore, won’t be entitled to dividends. However, CFDs offer such perks as access to leveraged trades.
Investing in CFDs through Plus500 would also allow you to short-sell Lloyds stocks. This is where you are speculating on the value of the company going down. Much like eToro, Plus500 offers commission-free trading on its stocks, so again, it’s just the spread that you pay. The UK-based platform holds multiple licenses, including the FCA, CySEC, MAS, and ASIC.
Its parent company is also listed on the London Stock Exchange and the online trading arm, Plus500 UK LTD is authorised and regulated by FCA. Registering a Plus500 trader account is also easy and straightforward as you only need minimum deposit of $100. It also supports a wide range of deposit and withdrawal options including debit/credit cards, Paypal, and bank transfer. There are no deposit or withdrawal fees; regardless of which payment method you opt for.
- Fast order execution
- No CFD stock trading commissions
- variable but highly competitive spreads
- Stocks only available via CFDs
- Its educational resources are sparse
How to Buy Lloyds Shares from eToro
Looking to buy Lloyds shares right now, but not too sure where to start? Below you will find our step-by-step guide on how to make an investment through eToro. Our top-rated broker allows you to open an account, deposit funds, and buy shares in less than 10 minutes. If you want to use a different online broker, the steps below remain largely the same.
Step 1: Search for Lloyds (LLOY) Stock
eToro lists over 800 shares on its platform, so you are best to enter ‘LLOY’ in the search box at the top of the page.
Step 2: Click on ‘Trade’
Next, click on the ‘Trade’ button.
Step 3: Set-Up Order and Buy Lloyds Shares
You will now see an order box, which needs to be filled in. If you’ve never placed a stock trading order online before, this can appear somewhat confusing.
As such, be sure to follow the guidelines outlined below.
- Amount: This is the amount of Lloyds shares that you wish to buy in dollars and cents. In our example, we are buying $100 worth of Lloyds stock, so we enter ‘100’ into the ‘amount’ box.
- Set Rate: Leave this set as a ‘market order’ if you wish to take the next available price. Alternatively, if you want to buy Lloyds shares at a specific price, change this to a ‘limit order’.
- Stop Loss: It’s best to set up a stop-loss order when trading shares online, as this will allow you to mitigate your risks. Enter the price that you wish your trade to be closed at in the event the markets go against you.
- Take Profit: To avoid the need to sit at your computer and manually exit your trade, a take-profit can do this for you. Simply enter the price-target that you want the trade to be closed at.
Finally, click on ‘Buy’ to complete your Lloyds shares order.
Why Invest in Lloyds?
Still sitting on the fence as to whether or not an investment in Lloyds is right for your long-term goals? Below we have listed some of the reasons why you might be bullish on the company. Take note, you need to perform your own research prior to making an investment and never buy shares on the back of somebody else’s advice.
Shares are Heavily Discounted
The obvious starting point is the current price of Lloyds stocks in relation to its previous all-time highs. In fact, we need to go all of the way back to April 1998 for this, where its stocks were priced at 652p. Fast forward to Q2 2020 and the very same stocks are worth just 33p. This represents a decline of 95% -with the company now staring at a market capitalization of just £21 billion.
It’s highly unlikely that we will ever see highs like we did in 1998. However, a reasonable price target might the 63p that Lloyds was priced at in early 2020. Like the rest of the UK banking scene, the Coronavirus pandemic whipped a huge chunk off of Lloyds’ share price in a matter of weeks. If you’re happy to put a line through this, a return from 33p to 63p would present an increase of 90%.
An end to the PPI Saga
Lloyds was one the biggest perpetrators of the payment protection insurance (PPI) misselling saga, with the bank eventually forking out about £1.8 billion in refunds. Lloyds put the liability through its books in late 2019, which resulted in a Q3 drop in profits of 97%. On the flip side, the infamous PPI scandal is now behind the bank, at least in terms of financial liability. As such, Lloyds can once again focus its resources on profit.
On top of targeting a pre-COV-19 price-point of 63p, an investment in Lloyds would also yield dividends. Paid out every three months, this will allow you to earn fixed-income.
About Lloyds Shares
Company and Stock history
Lloyds Banking Group is a major UK high street institution was first launched in the 17th century. The company is listed on the London Stock Exchange, and it forms part of the FTSE 100 index. The bank is now significantly smaller than it once was, which is evident is the sheer-decline of its shares over the past two decades.
In fact, it was way back in 1998 when Lloyds last hit an all-time high stock price, when its shares were worth 652p. The banks’ decline was further amplified as a result of the 2008 financial crisis. In fact, the UK government was required to bail the bank out, resulting in a 43.4% purchase.
Since then, Lloyds stocks have been on a downward trajectory. At the time of writing in April 2020, you can purchase its stocks at just 33p – a mere fraction of its 1998 value. Although the vast majority of the UK banking scene has struggled since 2008, Lloyds recovery has been much slower in comparison to its industry rivals. For example, net income in Q3 2019 declined by a whopping 6%, amounting to a drop of £4.2 billion.
Should I Buy Lloyds Shares?
You will struggle to find an analyst that is bullish in the future direction of Lloyds. Whether it’s in terms of UK branches, net income, or operating profits, the bank is a mere shadow of its former self. This has translated into a rock-bottom share price that is now worth 95% less than it was in 2008. To put that figure into perspective, a £10,000 investment in Lloyds in 1998 would now be worth just £950.
On the flip side, there is arguably room for movement based on its current price of 33p, at least in the short-term when you consider the impact of COV-19. More specifically, if the bank is able to recover its pre-pandemic losses back to the 63p mark, this would represent a huge upswing. However, there is no guarantee that this will be the case, so be sure to perform your own research prior to parting with your money.
What all-time high share price does Lloyds stocks have?
You would need to go way back to 1998, where Lloyds stock was worth 652p per share. Fast forward to April 2020 and these very same stocks are worth just 33p.
Does the UK government still own Lloyds?
The UK government purchased a 43.4% stake in Lloyds as a result of the 2008 financial crisis. The shares have since been sold by the government.
Does Lloyds pay dividends?
Yes, Lloyds does pay dividends, with payments distributed every three months.
Do I need to buy whole Lloyds shares?
No, both of the brokers recommended on this page allow you to buy fractional stocks in Lloyds. This means you can invest as little as you like. With that said, Lloyds shares are only worth 33p, so this shouldn't be an issue anyway.
What stock exchange are Lloyds stocks listed on?
Lloyds is listed on the London Stock Exchange, and it forms part of the FTSE 100.
Who owns Lloyds?
Lloyds is a public listed company (PLC), so it owned by its shareholders. As such, by purchasing just one share, you are effectively a part-owner in the bank.
What is the symbol for Lloyds stock on the LSE?
Lloyds is listed on the LSE under the ticker symbol 'LLOY'.
Can I short Lloyds stock?
Not feeling confident on the future direction of Lloyds and think its share price will continue to fall? If so, you can short Lloyds stocks via a CFD broker.
When was Lloyds founded?
Lloyds bank traces its roots way back to the 17th century.