- Are you interested in buying shares in a multinational oil and gas company?
- BP is a good dividend stock, which is one of its biggest attractions for investors.
- BP is scaling up investments in low carbon fuels and reducing emissions, in anticipation of its green energy future.
BP plc (NYSE: BP), previously known as British Petroleum, is a British multinational oil and gas company. It is one of the world's oil and gas "supermajors". Founded in 1909, it listed on the London Stock Exchange in 1954 and is headquartered in London.
Read on for a complete guide on where and how to buy shares in BP from Australia.
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Starting with oil, BP also has coal and mineral mining in its history, later also moving to gas, and from onshore to deepwater operations. Today BP is turning towards a new mix of energy sources with a goal to move into a lower carbon future and net-zero emissions. BP's transition to greener energy has taken place at a faster pace than its competitors, including Royal Dutch Shell and ExxonMobil. The company plans to cut oil production by around 40% in the next 10 years, selling oil assets and increasing investments in renewable energy. BP subsidiaries include Castrol, Aral, and BPX Production Company, among others.
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Step 1: Select a broker
You can trade shares listed on overseas markets with an online broker. You have many options in Australia.
These are just a few of the things to consider when choosing a broker.
Access to the London market
BP is listed on the London stock exchange. Many share trading apps are limited to either Australian or US markets, so check which markets your broker has access to before opening an account.
Trade without commissions
You can trade without commission on many trading platforms in Australia. This saves you a lot of money over the long term.
Brokers that offer fractional shares allow you to purchase a part of the share. This allows you to diversify your holdings more easily.
Trading shares shouldn't be complicated. You should choose a broking platform that is easy to use and doesn't require a lot of learning.
Company analysis and research
A trading platform that has a strong research and analysis section can help you make informed decisions based on market updates, price history, quarterly earnings reports, etc. A few brokers offer analyst recommendations.
Step 2: Fund your trading account
You need to fund your account before you can buy shares. It’s possible that your funds will take some time to clear before trading can be started.
Step 3: Set your budget
When buying shares, you should only spend money you can afford to lose. Shares are volatile. Fractional shares allow you to start small.
Step 4: Invest via an ETF or in shares
An ETF (Exchange Traded Fund), while more diverse than shares, is still safer than investing directly in an active share.
ETFs with exposure to BP include Avantis International Equity ETF (AVDE), Pacer Trendpilot International ETF (PTIN), and Pacer Global Cash Cows Dividend ETF (GCOW).
Step 5: Set up an order
You can choose from a variety of order types to customise when and how much of each share should be purchased. These order types are widely available.
Market orders are executed at the current market rate for the share. The price you get at order execution might not be the same as the one offered at the time the order was placed.
A limit order is not like a market order. It's executed at your specified price – either a maximum buying price or a minimum selling price.
This type of order allows you to automatically buy or sell your shares within a specified price range (e.g. a buying stop limit order for when the share price rises above US$100 – the 'stop' – and it can still be bought for less than US$105 – the 'limit'). However, if the market is moving quickly against you, the order may not be executed if the price rises or falls past your limit price.
This allows you to determine the price at which to buy or sell, in order to limit your losses. It is often used to protect a trade against market volatility. You could, for example, set up a stop loss at US$125 per share. Your stop loss order will automatically be executed if the price drops below that level and your order will be filled at the next available market price.
Step 6: Place your order
After you have chosen a broker and decided what type of investment you want, you can place an order.
Step 7: Monitor your investment
When you buy shares in a company, either to hold long term or to benefit from speculating on price fluctuations, you need to keep a track of the company’s performance and its share price movements.
Track BP’s performance
BP is a dividend-paying company. Keep an eye on how BP performs as well as its share price movements. As part of tracking performance, you want to monitor the company’s financial fundamentals to have confidence that it performs to your expectations.
Trends and patterns in the global energy sector
The global energy landscape is undergoing major shifts. The COVID-19 pandemic and the economic crisis that followed resulted in unprecedented disruption to the global energy landscape. The move to a less carbon intensive economy will also have huge ramifications, and present opportunities, to companies like BP.
BP’s key competitors include Shell (NYSE: RDS.A), Petrobras (NYSE: PBR), Chevron (NYSE: CVX), Saudi Aramco, ExxonMobil (NYSE: XOM), PetroChina, and Marathon Petroleum (NYSE: MPC).
Disclaimer: We put our customer’s needs first. The views expressed in this article are those of the writer’s alone and do not constitute financial advice. Advertisers cannot influence editorial content. However, Finty and/or the writer may have a financial interest in the companies mentioned. Finty is committed to providing factual, honest, and accurate information that is compliant with governing laws and regulations. Do your own due diligence and seek professional advice before deciding to invest in one of the products mentioned. For more information, see Finty’s editorial guidelines and terms and conditions.