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Why People May Invest in Royal Mail<\/h2>\n Royal Mail has a vaunted history and is beloved by the UK public.<\/p>\n
Mail Volume is Rising<\/h3>\n One of the most bullish arguments for Royal Mail is that mail volume in the UK is rising. That\u2019s been true for a number of years thanks to the growth of eCommerce as a fraction of overall retail sales in the country. But it\u2019s particularly true in the wake of the coronavirus pandemic, as UK residents turned to the mail system for an overwhelming amount of their purchases.<\/p>\n
Right now, Royal Mail accounts for around half of all mail volume in the UK. In fact, analysts at Citigroup believe that Royal Mail\u2019s 2020 profit forecast may be underestimated by as much as 400%!<\/p>\n
Royal Mail Shares are Cheap<\/h3>\n Another point that\u2019s potentially in Royal Mail\u2019s favor is that the share price is beaten down \u2013 perhaps overly so. As recently as 2018, Royal Mail shares were trading at a price of 598p. Fast-forward to April 2020, in the midst of the coronavirus pandemic, and the shares hit a bottom of 124p.<\/p>\n
The Dividend May Return<\/h3>\n Royal Mail suspended its dividend as a way to keep extra cash on hand during the coronavirus pandemic. But before that suspension, the company paid out 7.5p per share to investors.<\/p>\n
There is of course no guarantee that Royal Mail will reinstate its dividend at all, or that it will offer the same yield if it returns.<\/p>\n
About Royal Mail Shares<\/h2>\nCompany and Share History<\/h3>\n Royal Mail was established in 1516 by King Henry VIII and was first made available as a public postal service throughout England in 1635. In the 20th<\/sup> century, the reach of the postal service was extended throughout the British Empire.<\/p>\nIn 1969, the postal service was modified from a government department to a state-run corporation. This arrangement lasted until 2011, when the organization was privatised and 10% of shares were given to Royal Mail employees. The company began trading on the London Stock Exchange in 2013.<\/p>\n
Importantly, the British government maintains some requirements of Royal Mail. For example, the service must continue to offer universal fixed-price service within the UK at least through 2021.<\/p>\n
Royal Mail Share Price<\/h3>\n Shares of Royal Mail rose in value rapidly when the service was first listed on the London Stock Exchange and the company consistently traded above 400p per share until 2018. Shares peaked at 598p in May 2018 before falling abruptly to an all-time low of 124p per share in April 2020. The share price has recovered slightly, in part thanks to Citigroup\u2019s \u2018Buy\u2019 rating for the company.
How to Buy Royal Mail Shares\u00a0<\/h2>\n To show you how to buy Royal Mail shares from an online investment platform<\/a>, we\u2019ll walk you through the process.<\/p>\nStep 1: Search for Royal Mail Shares<\/h3>\n Enter \u2018Royal Mail\u2019 in the search bar at the top of the page. When the company appears in the drop-down menu, click on it.<\/p>\n
Step 2: Click on \u2018Trade\u2019<\/h3>\n On the Royal Mail page, click on the \u2018Trade\u2019 button on the right to open an order form.<\/p>\n
Step 3: Buy Royal Mail Shares<\/h3>\n In the order form, you\u2019ll need to decide on several important parameters that control your trade:<\/p>\n
\nAmount:<\/strong> You need to enter how much money you want to invest in Royal Mail. Either enter an amount in US dollars or click \u2018Units\u2019 and specify a number of shares to buy.<\/li>\nSet Rate:<\/strong> You can either decide to buy Royal Mail at the current market rate or specify a lower price.<\/li>\nStop loss:<\/strong> Setting a stop loss is a good way to prevent a bad trade from turning into a huge loss.<\/li>\nTake Profit:<\/strong> A take profit level is similar to a stop loss, except that the platform will sell your shares for a profit when they reach a specified price. If you are investing in Royal Mail for the long term, you may not want to set a take profit level.<\/li>\nLeverage: <\/strong>You can also specify whether or not you want to use leverage when trading share CFDs. Beginner traders should be extremely cautious with leverage. While leverage can magnify your profits, it also multiplies your losses when a trade goes against you.<\/li>\n<\/ul>\nWhen you are ready to buy Royal Mail shares, click \u2018Trade\u2019 to complete your order.<\/p>\n
Conclusion<\/h2>\n Royal Mail has a long history in the UK and the company enjoys wide popularity. While the share price has taken a nosedive in recent years, some analysts believe the company is now undervalued and offers a fair degree of upside.That said, it\u2019s impossible to tell what the future holds for Royal Mail and it is likely to be rocky even if mail volume remains high.<\/p>\n
FAQs<\/h2>\n <\/time><\/time>