How to buy British American Tobacco shares (BATS)

British American Tobacco is a multinational corporation that makes and sells nicotine products. This guide teaches you the key things you need to know about the company before investing.
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Updated: Jul 6, 2023
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This page covers the essential knowledge you need to know about British American Tobacco. We cover the history of the tobacco industry and the company, and its investment outlook for the future.

Compare the best British American Tobacco trading platforms

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If investing now is your intention, click one of the links below. These options are some of the best brokers around and will set you on the right path. For more information about British American Tobacco, scroll down this page.

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Interactive Brokers (U.K.) Limited is authorised and regulated by the Financial Conduct Authority. FCA Register Entry Number 208159. Products are only covered by the UK FSCS in limited circumstances.

How to buy British American Tobacco stock, a step-by-step guide

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We have broken down the process of investing in British American Tobacco into 5 easy-to-follow steps to help you get started.

  1. Choose a broker. You will need to use an online brokerage platform. There are many different options to choose from, each with its own unique benefits and drawbacks. The comparison table above can help you select the right broker for you, and you can head to our comprehensive broker reviews if you’re still unsure, or check out our apps for trading page.
  2. Create an account. Once you’ve selected your broker, simply go to their website and create an account. The steps required for this will vary from platform to platform, but generally, you can expect to have to provide your name, email address, phone number, and some form of photo identification.
  3. Deposit funds. Log into your stock broker account and select the option to deposit funds. Depending on your broker you’ll have a variety of payment options available; most brokers accept bank transfers and debit card payments, but not all accept e-wallets such as PayPal. Select your preferred payment method and deposit the amount of money you wish to invest in British American Tobacco shares.
  4. Place an order for BATS stock. Search for British American Tobacco’s ticker symbol (BATS) and see the current price at which the stock is trading. If you’re happy with the price, enter the number of shares you wish to buy and place your order.
  5. Execute your order. Once you have placed your order, your broker will automatically execute it for you and your British American Tobacco shares will be listed in your account. Congratulations, you’ve just bought shares in British American Tobacco!

What is British American Tobacco? And should I invest?

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British American Tobacco is based in the UK, and it manufactures and sells cigarettes, tobacco and other nicotine products. Founded in 1902, and with 55,000 employees spread across 180 countries, the company has grown into the biggest tobacco company worldwide based on net sales to is 150 million consumers.

The company has been public on the LSE since way back in 1911, and now it is also listed on the NYSE as well as being part of the FTSE100. Moreover, you may well have seen a brand of cigarettes under the British American umbrella without realising it, because the company’s brands include Dunhill, Kent, Lucky Strike, Pall Mall and Rothmans amongst others.

The real difficulty for British American Tobacco is that the tobacco sector is shrinking and has been for the last decade. Health risks surrounding smoking have resulted in warnings on cigarette packaging and things like public health campaigns, sin taxes and anti-smoking legislation. The company hopes its new products, such as Glo –  a device that heats tobacco sticks instead of burning them – can generate new growth.

How has the company performed in recent years?

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Based on its share price, rather poorly. For the last decade, stocks have performed well as an investment class, but British American Tobacco has consistently lagged behind. However, with a forward dividend yield of around 7.6%, it is a fairly strong dividend stock.

The company has plenty of competitors in the Tobacco space, such as Philip Morris International and Altria, and both of these have generated significantly higher total returns in recent years. Due to falling demand, to chase revenue, British American Tobacco has increased its prices, and while this may pay off in the short term, the long-term picture looks less rosy.

To re-establish growth, the company is largely reliant on its new non-smoking products. This means satisfying the regulators who are keen to scrutinise the industry at every opportunity. In addition, Glo faces stiff competition from PMI and Altria’s iQOS devices, and BATS’ Velo nicotine pouches face a similar level of competition from Altria’s On.

Is it a good time to buy British American Tobacco shares now?

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This entirely depends on your own financial goals and assessment of the company’s value. If you want to invest into a stock for the long term in the hope that it returns growth in the future, you need to have faith that the company’s new products will generate sufficient revenue.

For short-term traders, we recommend you conduct technical analysis of the stock and its current trading price, and this will enable you to buy low and sell high for an accelerated profit.

If investing in BATS is something you are interested in, make sure to stay up-to-date on the latest developments concerning the company with our analysis. Click any of the links below to get informed about British American Tobacco and the surrounding market:

Buying, selling and trading British American Tobacco shares for beginners

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What to do before buying shares

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You should always take the time to research a stock fully before investing your money, especially if you haven’t bought shares before. The more knowledge you have, the better your chances of making a wise investment. 

With that in mind, here’s a checklist to run through before investing in British American Tobacco shares.

  1. Research the company. You should always examine the fundamentals of a company first. What is British American Tobacco? How did the company get its start? How did it grow? Is British American Tobacco’s revenue and profit growth picking up? Is the company innovating? The more you know about British American Tobacco, the better positioned you’ll be to make smart investment decisions.
  2. Make sure you understand the basics of stock investing. Before you start investing in the stock market, make sure you have an understanding of what the market is how it works. This will ensure that you have more clearly defined goals and have thought through how you will achieve them.
  3. Decide between share dealing and CFD trading. Choose the type of investment strategy you want to pursue, and make sure you have carried out the necessary fundamental or technical analysis for share dealing and CFD trading respectively.
  4. Set the size of your budget. The golden rule of investing is never to risk more than you can afford to lose. Not every investment you make will result in a profit, so it is important to set a budget that not only allows good potential for capital growth, but also protects against overly damaging losses.
  5. Find the right broker. Individual brokers each have their own pros and cons. Some will have low fees but have a user interface you struggle to understand, whereas others may be a bit more expensive but come with a range of features that you want to take advantage of. Use our broker reviews to find the right platform or stock app for you.
  6. Examine broader market conditions. No stock exists in a vacuum, and it’s always important to analyse the general trends of the stock market as a whole before investing. If a bear market is setting in and stock prices are falling, it’s best to wait it out and invest your money later when the stock is cheaper. While if the market is looking bullish, you’ll want to make your investment quickly to get the maximum benefit from rising stock prices. Follow the news to stay on top of the financial markets.

What is the difference between buying, selling, and trading shares?

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If you’re new to stock investing, then it’s important to understand the basics of how to buy, sell, and trade British American Tobacco shares. Here’s a quick run-through of what’s involved in each.

Buying British American Tobacco

This process involves finding a broker and placing an order for British American Tobacco, as outlined in the steps further up this page. Ideally, you want to time your investment when the stock’s price is low so that you can profit by selling the shares after they increase in value.

Selling British American Tobacco

When you sell any British American Tobacco shares you have bought, you’ll want to do so at a higher price than the one at which you bought to earn a profit. 

When you sell is up to you. You might decide to hold for the long term, hoping to benefit from the company growing steadily throughout. Or, if you see that British American Tobacco’s stock is already up a lot compared to the price you bought it and you’ve noticed that the stock market is starting to fall, it might make sense to sell and take your profits to invest elsewhere. Equally, if the stock has fallen since you bought it and looks set to fall further, it might be a good idea to cut your losses by selling your shares.

Trading British American Tobacco

Trading is the same process, it’s just done over shorter periods of time with the aim to make small profits on a regular basis. This means that you can make money faster and spend your profits in your day-to-day life – however, on the other side it means you can lose money faster as well. For inexperienced investors, we generally recommend making investments for at least 6 months to a year instead of making trades in quick succession.

You can trade British American Tobacco shares through buying and selling shares, or by trading with CFDs. These allow investors to speculate on stock prices and trade with leverage in pursuit of bigger gains. CFDs trading is explained further in the next section, but it is worth noting that beginners should avoid trading with leverage. It comes with large risks and is best left to experienced investors.

Share dealing vs CFD trading

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When it comes to investing in any stock, the two options you have are share dealing and trading. Which one of these methods to opt for largely depends on your investment timeline, with investors thinking long term tending to go for share dealing, and those looking for short term gains pursuing a more aggressive trading strategy.

Here’s a quick summary of the two approaches, and the pros and cons of each.

Share dealing 

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Share dealing refers to the practice of holding shares in a particular company over the long term. When investing like this, you’re seeking to profit either from dividend payments or an increase in the stock’s price over time.

When investing your money this way, it is important to do a thorough fundamental analysis of the company in which you are investing. You want to put your money in a stock you believe will trend upwards over time, even if there is some market volatility along the way, rather than get distracted by shorter-term peaks and troughs.

Pros

  • Can build wealth over time to achieve financial goals
  • Don’t need to be very reactive to short-term market movements
  • Some stocks will give you an income through regular dividend payments

Cons

  • Takes a long time to realise any profits
  • Your capital is tied up in stocks and cannot be used for other investments

CFD Trading 

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If your aim is to generate profits in the short term, then you might be better off trading shares than holding them in your portfolio. Stock trades like this are executed using CFDs (contracts for difference), which allow investors to trade against the value of a stock without having to take ownership of it. When CFD trading, investors are looking to buy shares in British American Tobacco and sell them fast to profit from short-term fluctuations in value.

One aspect of CFD trading that many investors find attractive is that they allow you to trade with leverage. This means you can place large trades while only putting up a fraction of the value yourself – for instance, if a platform offered leverage of 1:10, you could put £10 into BATS shares and be able to trade £100 worth. This can maximise profits if the market moves in your favour, but be careful as it can also lead to heavy losses.

When trading using CFDs, it is key to be skilled at technical analysis and reading stock price charts. As you’re trading stocks quickly and frequently, the fundamental strength of the company in which you’re investing isn’t as important as being able to predict how its stock price will rise and fall minute-by-minute.

Pros

  • Can generate fast profits if you read the market right 
  • Some platforms allow you to trade with leverage
  • Prevents your capital being tied up so you can take advantage of investment opportunities

Cons

  • Trading with leverage is risky and can lead to big losses
  • Doesn’t necessarily generate growth over the long term

Consider which approach suits you best and craft an investment strategy that works for you. If you need more information, use our trading course and read our guide to CFD trading to get you up to speed. 

If neither of these options appeal to you, then you can find a variety of other ways to invest on this page. If, however, you’re ready to get shares now, simply select one of the brokers in the table above and get started. 

How to choose a broker

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With the wide variety of online brokers available these days, it can be hard to figure out which is the best service to go with. Our comparison table and in-depth reviews can help you cut through the noise, but by and large, these are the aspects you should be considering when selecting a broker:

  • Range of stocks available. The most important thing is that you can actually use the broker to find the shares you’re looking for. Some brokers offer more stocks than others, and many will allow you to trade other assets, such as cryptocurrency and commodities.
  • Fees and commissions. You want to keep as large a chunk of your profits as you can, so it’s important to make sure your broker doesn’t charge high fees that can eat into your profits.
  • Regulation. You should only use regulated brokers to place trades. Unregulated brokers can be risky and offer little to no protection if the business were to fail while you had funds in your account.
  • Payment methods available. You might want to get British American Tobacco shares using a specific payment method, such as PayPal. Not all brokers accept every payment method, but using our comparisons you can search only the brokers that support the option you’re looking for.
  • Reputation. One of the strongest indicators of a broker’s reliability is the reputation it has with the customers who have used it. Brokers are online businesses, and as such many user experiences can be found online. You can check these out in addition to our reviews to make sure you choose the right platform.
  • Customer service. As you’re going to be investing your money using the platform, you want to check that the broker offers good customer service in case you have a query or something goes wrong.
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Latest British American Tobacco news

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British American Tobacco (LON: BATS) share price gapped upwards after the company published encouraging financial results. The company’s shares jumped to a high of 2,714p, the highest level since May 10th. Overall, they have rebounded by more than 8.50% from the lowest level this year. Strong
British American Tobacco (LON: BATS) share price continued its bullish momentum on Monday as investors waited for the upcoming Q4 and full-year results. The shares rose by over 1%, making it the best performer in the FTSE 100 index. They have risen in the past six consecutive days and are nearing th
British American Tobacco PLC (LON:BATS) has returned 23.99% to investors year-to-date. Imperial Brands PLC (LON:IMB) has 10.34% returns in the same period. The strengths of the two companies illustrate their defensive features in good and bad times. BATS and Imperial Brands offer consumer goods in t
Altria Group (NYSE:MO) and British American Tobacco Industries (LON:BATS) are two stocks that will hold up well in the declining market. Altria Group is trading at $51.09. This is after declining 6.24% last week and a further 3.68% this week. At the price, Altria Group has a PEG ratio of 2.75 and a
British American Tobacco Industries PLC (LON:BATS) is a consumer defensive stock fit for investment during the declining phase of the economic cycle. Being a consumer defensive stock means that the products and services offered by the business will remain in demand regardless of the economic conditi
British American Tobacco plc (LON: BATS) said on Wednesday that its full-year pre-tax profit came in better than last year on the back of its cost-saving measures and a wider increase in organic revenue than what it had previously anticipated. The company, however, warned that the ongoing Coronaviru

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Charlie Hancox
Financial Writer
Charlie is a Financial Writer for Invezz. He covers commodities, cryptocurrencies, and breaking news. Prior to joining Invezz he helped grow Crux Investor into the fastest-growing... read more.