How to buy Rolls Royce shares (RR)

By:

Charlie Hancox

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.

Updated: Jul 6, 2023

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This page has everything you need to know about Rolls Royce. We cover the history of the company, its recent performance as an investment, its potential for future growth, and where to buy Rolls Royce shares online.

Compare the best Rolls Royce trading platforms

If you are looking for the best place to buy Rolls Royce stock, we can help. Check out our selection of online brokers below. Having tested these platforms with scrutiny, we have determined they are the best options for your investing and trading activities. To keep learning about Rolls Royce, simply scroll down.

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How to buy Rolls Royce stock, a step-by-step guide

The process of investing in a company is simple nowadays, 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. In order to invest in Rolls Royce stock, you need to use an online stock 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.
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 Rolls Royce shares.
4. Place an order for RR stock. Now navigate to the stocks section of the brokerage platform of your choice. Here you’ll be able to search for Rolls Royce’s ticker symbol (RR) 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 purchase and place your order.
5. Execute your order. Once you have placed your order, your broker will automatically execute it for you and your Rolls Royce shares will be listed in your account. Congratulations, you’ve just bought shares in Rolls Royce.

What is Rolls Royce? And should I invest?

Founded by Charles Rolls and Henry Royce and established in 1904, Rolls Royce manufactures engines for civil and military aircraft, and power systems for other industries. The company was previously known for making luxury cars, but it sold this side of the business following financial issues in 1980, though it maintains the rights for the brand name to this day.

It has evolved into one of the world’s most recognisable brands, and a 1987 marketing study claimed only Coca Cola was known better worldwide, though this has likely changed in the last few decades. However, the brand remains valuable today, despite the lack of revenue from actual car sales.

As an industrial company, Rolls Royce is at the forefront of manufacturing and innovating systems that are important to the infrastructure of the world. The company’s primary revenue is generated by the 35 types of commercial aircraft it powers, totalling over 13,000 engines around the world. This is followed by power systems, then defence, then its subsidiary, ITP aero.

How has the company performed in recent years?

The company is listed on the London Stock Exchange, and its share price has performed disappointingly for the last few years, though there are plenty of reasons that explain this. For example, the impact of COVID-19 on the global aviation industry has led to major doubts regarding the demand for the engines that Rolls Royce provides.

The impact of the pandemic is obvious when you consider that Rolls Royce posted loss of £4 billion in 2020, having made a profit of £583 million the year before. Consequently, Rolls Royce’s dividend yield has dropped to around 0.11%.

For those who still believe the company is fundamentally profitable and its growth has just been disrupted by unprecedented global affairs, they may consider it to be undervalued. Should the aviation industry recover well from COVID-19, Rolls Royce could be set for a resurgence, though this remains incredibly unpredictable.

Is it a good time to buy Rolls Royce shares now?

That depends on your investing strategy and outlook of the aviation industry. If you are a long-term investor and believe that commercial aircraft travel will become more popular in the coming years, buying Rolls Royce could be a smart move; just make sure you do your due diligence first.

For short-term traders, the volatility surrounding the aviation sector could lead to significant opportunities. If you have a good reading of the shifting sentiment of the market, you may be able to leverage this knowledge by purchasing shares for a low price and selling them for an elevated price.

However you choose to invest in Rolls Royce, make sure to stay informed about the company and its market performance with our below analysis:

Buying, selling and trading 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 investing in Rolls Royce shares.

1. Research the company. You should always examine the fundamentals of a company before investing. What is Rolls Royce? How did the company get its start? How did it grow? Is Rolls Royce’s revenue and profit growth picking up? Is the company innovating? The more you know about Rolls Royce, the better positioned you’ll be to make smart investment decisions.
2. Make sure you understand the basics of stock investing. Before 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. Use our reviews to find the right platform or stock trading 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. If, however, the market is looking bullish, you’ll want to make your investment quickly to get the maximum benefit from rising stock prices. Follow the latest news to 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 Rolls Royce shares. Here’s a quick run-through of what’s involved in each.

Buying Rolls Royce

This process involves finding a broker and placing an order for Rolls Royce 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 Rolls Royce

When you sell any Rolls Royce 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 shares for the long term, hoping to benefit from the company growing steadily throughout. Or, if you see that Rolls Royce’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 Rolls Royce

Trading is the same process as buying and selling shares, 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 Rolls Royce shares outright, or you can use something called 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 RR 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 trading course.

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

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 purchase the shares you’re looking for. Some brokers offer more stocks than others, and many will allow you to trade other assets, such as crpytocurrencies, 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 invest. 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 invest by using a specific payment method, such as PayPal. Not all brokers accept every payment method, but by using our comparisons, you can search for 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.