How to buy Centrica shares (CNA)

By:

James Knight

James is a lead editor for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets. His ... read more.

Updated: Jul 6, 2023

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This page provides an overview of Centrica, along with what prompted its long-term share price decline, and where there are signs of positivity for a potential buyer. Read on to find out more, as well as the best trading platforms to invest with.

Compare the best Centrica trading platforms

If you have all the information you need and just want to invest, you can start immediately by visiting one of our trusted brokers below. We’ve assessed all the best brokers and compared them so that picking the right choice for you is quick and easy. If you’re not ready to do that yet, keep reading for more information on Centrica.

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How to buy Centrica stock, a step-by-step guide

The process isn’t massively complicated, so don’t worry even if you’re new to stock investing. These are the steps to follow in order to complete your investment:

1. Choose a broker. You will need to use an online brokerage platform. There are many different options to choose from, each with their 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.
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 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 Centrica shares.
4. Place an order for CNA stock. Search for Centrica’s ticker symbol (CNA) and see the current price at which the stock is trading. If you’re happy with the price, enter the amount of shares you want and place your order.
5. Execute your order. Once you have placed your order, your broker will automatically execute it for you and your Centrica shares will be listed in your account. Congratulations, you’ve just bought shares in Centrica!

What is Centrica? And should I invest?

Centrica (LON: CNA) is Britain’s biggest energy provider and the largest gas supplier through its British Gas brand. It is also a major electricity supplier in the UK and supplies energy worldwide, particularly to the US and Ireland.

Centrica was formed in 1997 when British Gas split into three separate companies, with Centrica taking over responsibilities of gas supply, production, and trading. Originally it had a monopoly over the gas supply but that has gradually been whittled away, and now there is significantly more competition, while it also expanded into supplying electricity as well.

Alongside its core energy supply businesses, Centrica expanded into a variety of industries within the energy sector, including nuclear power. Its period of expansion looks to have ended, with a focus now on a domestic energy supply business that has been faltering, along with the share price, for some time. 

How has the company performed in recent years?

Having traded at 400p in 2013, Centrica’s share price has fallen consistently in value ever since, to the extent that it was trading below 50p in the aftermath of the coronavirus pandemic. In 2020 it lost its place on the FTSE 100 and now trades on the FTSE 250.

Some of Centrica’s biggest problems have come from a change in strategic direction during the 2010s that did not prove a success, at least in terms of the share price. Under former CEO Ian Conn, Centrica moved away from oil and gas production towards home energy supply. That move did nothing to stop the slide, Centrica lost hundreds of thousands of home accounts as more and more competitors joined the fray. On top of that, a price cap on energy prices further hit the bottom line.

With many existing problems, the pandemic landed a further blow as demand for business energy dropped over 20%. Even a rise in home energy demand wasn’t enough to balance it out and Centrica was forced to reduce its expected earnings for the next few years, suspend its dividend and announce more job cuts. Unsurprisingly, all that bad news meant very little sign of a bounceback after the initial pandemic share price fall.

Is it a good time to buy Centrica shares now?

There is a lot of bad news surrounding Centrica but there are also a few more positive signs to consider. A change at the top combined with the sale of the US energy division could herald a more stable period along with an increase in cash reserves and a pathway to solving some of its biggest debt issues. It was forced to freeze its attempt to sell off its oil division, Spirit Energy, thanks to a global crash in oil prices but an improved economic outlook could help it finally fund a buyer.

A return to normality, or at least a clearer future, after the worst of the pandemic is over may also help boost Centrica’s prospects. Although the pandemic wasn’t the only reason for its 2020 struggles, the drastic drop in energy demand from businesses didn’t help. CNA could offer short-term opportunities for investors looking for places to bet on a pandemic recovery. 

While a recession increases the amount companies need to put aside to cope with bad debts, Centrica does have a good supply of cash which could be increased by offloading more non-core parts of the business. That is something to look out for as its new management group beds in. Potential buyers should also keep in mind that Centrica’s debt rating is a crucial factor to keep tabs on too, as it does hold a lot of debt and any downgrade would be bad news. 

You can find all the latest stock information on Centrica as well as the latest news and our technical and fundamental analysis below.

Buying, selling and trading Centrica shares for beginners

What to do before buying shares

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 you start.

1. Research the company. You should always examine the fundamentals of a company before buying its stock. What is Centrica? How did the company get its start? How did it grow? Is Centrica’s revenue and profit growth picking up? Is the company innovating? The more you know about Centrica, the better positioned you’ll be to make smart investment decisions.
2. Make sure you understand the basics of stock investing. Before starting out as an investor, getting involved in the stock market, make sure you have an understanding of 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. Our reviews of the best brokers can help find the right platform 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. If, however, the market is looking bearish, you’ll want to make your investment quickly to get the maximum benefit from rising stock prices. Stay on top of the latest financial markets in our news section. Our news section can help you keep on top of movements in the financial markets.

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

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

Buying Centrica

This process involves finding a broker and placing an order for Centrica stock, 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 Centrica

When you sell any Centrica 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 keep your stocks for a long time, hoping to benefit from the company growing steadily throughout. Or, if you see that Centrica’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 Centrica

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 Centrica 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

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 

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 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 

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 and sell stocks 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 CNA 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, then simply take our stock markets 101 course to learn the basics and read our guide to CFD trading to get you up to speed. 

How to choose a broker

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 forex 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 and buy shares. 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 Centrica 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.