How to buy Renault stocks in 2024

1. eToro

eToro is one of the most prominent social investment networks, with a mission to improve investors' knowledge and activity regarding finance. Since its inception in 2007, eToro has become the premier investment platform for novice and experienced traders, with a user base of over 17 million. You can read our full eToro review here.

Security and Privacy

When choosing an investment platform, security is among the biggest factors to consider. Since eToro is regulated by the Financial Conduct Authority (FCA) and the Cyprus Securities and Exchange Commission (CySEC), you can be assured that your funds and personal details are secure. Furthermore, eToro SSL encrypts all submissions to safeguard against hackers trying to intercept confidential information. Finally, the platform has two-factor authentication (2FA) to ensure the users’ accounts are safe.

Fees & Features

Both inexperienced and seasoned investors can take advantage of eToro's extensive library of cutting-edge trading methods. For instance, beginners in trading can take advantage of CopyTrading available on eToro as it allows them to mimic the actions of more experienced traders. Those with trading experience will be glad to find that eToro provides access to many markets, such as stocks, currencies, and cryptocurrency, all from one platform. Also, eToro is a commission-free service. However, the platform charges a monthly fee of £10 for inactivity to promote active trades on the platform.

Pros

• Copy trading feature
• SSL encryption to protect users' information
• Trading is commission-free

Cons

• Limited customer service

2. Capital.com

Capital.com, which originated in 2016, is an excellent multi-asset broker. With over 5 million users, it has established itself as a low-cost platform with low overnight fees, tight spreads, and 0% commission. You can read our full Capital.com review here.

Security and Privacy

Capital.com is an FCA, CySEC, ASIC, and NBRB-licensed corporation dedicated to providing the most effective trading experience in the world. It shows that users' data is secured and hidden on Capital.com, since the site follows stringent criteria to achieve this goal. Capital.com takes client data security seriously, and one way it does this is by complying with the PCI Data Security Standards.

Fees & Features

Capital.com offers a wide variety of no-cost brokerage services. Its financial policies are transparent. Any fees you incur will be made clear before you pay them. Capital.com's principal costs come from spread charges, which are often low compared to competitors. The broker's mobile trading app features an AI-powered tool that gives clients personalized trading information by employing a detection algorithm. In addition, Capital.com's multilingual customers can get in touch with a representative via email, phone, or live chat.

Pros

• Efficient email and chat support
• MetaTrader integration
• Commission-free trading

Cons

• Majorly restricted to CFDs

3. Skilling

Skilling is a multi-asset broker with significant growth. The broker offers excellent trading conditions regarding platform features and products available to experienced traders. Skilling now provides Forex, CFD, Stock, and cryptocurrency trading six years after its inception to individual investors. You can read our full Skilling review here.

Security and Privacy

When looking for a broker like Skilling, it is essential to check the broker's regulatory standing. Skilling is administered by the Financial Conduct Authority (FCA) and the Cyprus Securities and Exchange Commission (CySEC). In addition, the money that traders deposit into their Skilling accounts is held in a completely independent financial institution. For maximum safety, Skilling only uses top-tier financial institutions for this purpose. Tier 1 capital is the industry benchmark for measuring a bank's soundness.

Fees & Features

Skilling does not charge commissions for trading equities, indices, or cryptocurrencies. The platform charges Spreads which vary based on the share, but are typically very reasonable. Skilling offers two distinct account options for FX and metals CFD trading. The Standard Skill account has significantly larger spreads but no commissions. The Premium account charges commissions on spot metal and FX CFD trades for decreased spreads. Additionally, Skilling provides a demo account, mobile applications, and a trade assistant.

Pros

• Great platform choice
• Demo accounts

Cons

• High Spreads
• Service is unavailable in many countries, including the US and Canada.

Before learning more details about the company, let's have a quick look at its history and strategy and know how it makes money.

Renault’s History

Renault Group was founded in 1898 by Louis Renault and his brothers. Starting with the production of small taxi cars, the company realised its growth potential in motorcycle racing. Renault vehicles secured massive success in city-to-city racing held in Switzerland.

After winning the Grand Prix motor racing event in 1906, the company became a racing sensation. Between 1907 and 1908, the firm produced 3,575 units, becoming the country's largest car manufacturer. Renault also made stretchers, shells, ambulances, trucks, and FT17 tanks during the first world war.

In 1929, the group opened its first production line in Billancourt. To deal with the economic crisis, the company kept costs low, but things went wrong. In 1945, Renault underwent nationalisation and was named Régie Nationale des Usines Renault (RNUR).

Renault being a national corporation, the modernised plants were abandoned and new ones were purchased. Despite failing to gain a foothold in the US market, Renault continued its global expansion and embraced success amid the launch of 4CV - the small car for everyone. Later on, the company kept manufacturing Renault 4, Renault 5 until it introduced its first luxury car, the Renault 16.

Lapping through the successive years, the group also enjoyed fame in rally racing until 1980, when the company refreshed its product range by introducing the Renault 25 and Espace. During this tenure, the brand also stepped into formula one racing. Despite several winnings, the company started losing money and withdrew by the end of 1985. Renault regained profitability in 1987 by cutting costs and focusing on its core competencies.

In 1993, Renault hooked up with Volvo, but the merger didn't last long, and the company abandoned the project. Not to mention, the company's privatisation in July 1996 was historic. Renault took advantage of its newfound freedom and staked its interest in Nissan in 1999. The company kept innovating its production line and introduced new models, including Laguna and Megane.

The success in formula one helped the company's profile rank high, and the Renault-Nissan Alliance restructured and created new synergies. Renault accelerated its global expansion by buying Samsung Motors and Dacia. The launch of Logan in 2004 was the critical milestone of the company's strategy to win emerging markets.

In April 2010, Renault–Nissan joined hands with Daimler and set up a factory in Morocco capable of producing 170,000 vehicles per annum. Exploring the Chinese market, the company tried its best to increase its market share and started a joint venture with Dongfeng Motor Group. Over the next decade, the organisation went through a series of mergers and acquisitions, including the Renault-Nissan-Mitsubishi alliance in 2016, until the pandemic caught up with it.

In May 2020, Renault announced that it would cut 15,000 jobs globally amid declining sales and the COVID-19 pandemic. After recording a drop of 1.1% in revenue between January and March, the company anticipates car production reductions to focus on higher-margin vehicles.

What Is Renault’s Strategy?

Renault aims to modernise the automotive industry and become a tech and clean energy leader. The C-segment will benefit from better mix distribution, new lifecycle business opportunities, and cutting-edge technology development.

Besides improving its organisational structure, Renault plans to rebalance its product portfolio. The company anticipates launching 24 new models by 2025. According to the company, its product range will include ten models of electric vehicles at least.

The organisation also focuses on maximising its efficiency and resource optimisation to create value for the business, specifically in engineering and production. The company has reduced its power trains from eight to four while abandoning three platforms. With the introduction of new models in less than three years, the company's efficiency is self-explanatory.

How Does Renault Make Money?

While the company is primarily engaged in the production of automobiles and the delivery of related services, its main income stream comes from the sales of cars and light transport vehicles and the provision of financial services related to car sales.

How Has Renault Performed in Recent Years?

It's been quite a long time since the car industry has observed overcapacity issues in Europe. Renault isn't an exception either. The share price of the company has decreased drastically over the past few years. For instance, Renault stock had a value of around €75 between 2016 and 2018. It reached an all-time high of €98.75 as of April 06, 2018.

However, the stock value started diminishing and fell below €16.50 over the next two years. The pandemic made the company's financial outlook even worse than expected since the company witnessed a record loss of €8.05 billion for the year 2020.

Thanks to the increased sales volume and its turnaround profitability plan, followed by its focus on high-margin vehicles, the company came back on track. The company's quarterly net profit climbed up to €354 million in the following year. Consequently, the company's stock price started climbing back. As of this writing, it strengthens around €31.94.

Fundamental analysis is one of the most effective methods to determine the intrinsic value of a company's stock. It helps analysts to evaluate if the underlying stock is undervalued or overvalued. Fundamental analysts tend to examine multiple macroeconomic factors that can affect the stock value over time.

Before buying a company's stock, investors interpret different financial ratios and variables, such as the P/E ratio, return on equity, price-earning ratio, revenue, cashflows, etc. Let's quickly find out how these financial ratios can be helpful for decision making.

Renault's Revenue 

Revenue is the income stream of a company generated through the sales of products and services. It comprises both income and expense elements. We need to deduct the direct cost of sales from the revenue to find out a company's gross profit. However, all the indirect costs also need to be taken out from the revenue figure to calculate a company's net earnings. Given below is the table showing Renault's revenue over the past years.

Source: Yahoo! Finance

Renault's Earnings-Per-Share

As the name suggests, earnings-per-share helps investors determine how much return a company can generate on its every share. In other terms, it's a company's net profit allocated to each outstanding share. To calculate an EPS of an underlying company, you can divide its net earnings by the average number of outstanding shares at a given time. Not to mention, investors prefer buying the stock of companies having higher EPS values. While the company had a net loss of above €8 billion in 2020, it reported a negative EPS of -29.51 for 2020.

Renault P/E Ratio 

The price to earnings ratio helps investors compare the company's earning potential to its stock price. The primary purpose of finding a company's P/E is to determine if its share price reflects its profit-earning potential fairly. Using P/E ratios, investors can also calculate the minimum time the company would take to pay back their investment.

Finding the P/E ratio of a company is quite simple. All you need is to divide the current share price of a company by its EPS. However, you can only find the P/E ratio for companies making profits. Since the company witnessed a record loss last year, it is impossible to calculate its P/E ratio.

Renault's Dividend Yield

The dividend yield is the percentage of a company's share price that it pays out as a dividend. For instance, if a company whose share price is $5 chooses to pay a 0.50 cents dividend on each share, its dividend yield may be calculated as 0.5/5x100 = 10%.

Most companies pay dividends once a year. However, some organisations share their profits every quarter or after six months. Notably, established firms have lower dividend yields compared to growing companies.

However, a higher dividend yield doesn't necessarily reflect a profitable investment opportunity since sometimes companies increase dividend payments just to retain shareholders' interest.

As far as Renault's dividend yield is concerned, the company pays dividends on an annual basis. Renault paid a dividend of €3.55 the last time in 2019. However, after recording a substantial loss amid the pandemic, the company stopped its dividend payments.

Renault's Cash Flow 

A cash flow statement is a summarised representation of a company's cash transactions. In simple terms, it is the net amount of cash and cash equivalents coming in or going out of a business. A cash flow statement is one of the crucial elements to consider before buying a company's stock. It helps investors assess the liquidity of a business.

Essentially, a business should be capable of meeting its immediate debts and operational expenses to remain a going concern. Investors are mainly concerned with free cash flows because companies use them for business expansion or dividend payments. Renault's free cash flows seem to have improved compared to the last couple of years, as shown in the image below.

Source: Yahoo! Finance

Why Buy Renault’s Stock? 

Renault is a leader in the Electronic Vehicle (EV) market. Unlike Tesla, which focuses on performance and consumer sales, Renault targets fleets, such as car rental, taxi and food delivery.

• While Renault Master and Kangoo ZE can be the best fit for delivering parcels, the new Dacia Spring and redesigned Nissan Leaf will appeal to customers looking for a budget car. Hence, it holds massive potential to become the preferred choice of all classes of consumers.
• The company has already started reaping fruits from its renewed trading model and witnessed increased sales volume and profitability over the past six months.
• Analysts also anticipate the company to grow over the upcoming years. Since the company stock is comparatively cheap these days, buying it around the current levels could be a sensible decision before it's too late.

1. Understand the Company 

Getting yourself familiarised with the company's business model and other aspects is crucial. It helps you understand the company and its plans for the upcoming years. Spare some time to research the company and collect as many details as possible. Go through the company's financials and look for various fundamental ratios to assess the company's profitability potential. Watch out if the company has any competitive advantage or disadvantage over its competitors.

2. Understand the Basics of Investing

Learning the basic rules of investment can help you make appropriate decisions. Always start with little investment and do not stake too much interest in a single stock. Remember, things don't always go as expected. Even though stocks are less volatile than other tradable assets like cryptocurrencies, they can still exhibit sudden price changes owing to multiple reasons, including insider information. Therefore, don't panic and stay calm and focused. With a clear trading strategy in hand and various risk management tools, you can work your way to make profits.

3. Carefully Choose Your Broker

The selection of a reliable broker is crucial while trading stocks. Generally, regulated brokers tend to be more reliable than non-regulated ones since they must comply with regulatory instructions to continue their operations. Ensure that your selected broker holds regulations from a respective regulatory institution in your region, such as ASIC, CySEC and FCA. Besides a user-friendly trading platform, it should have all the basic and advanced trading tools available to offer you a rich trading experience. Do not forget to check the pricing structure of your prospective broker and the level of customer support before signing up with it.

4. Decide How Much You Want to Invest

Keeping in view your risk tolerance level, decide how much amount you wish to invest. It will undoubtedly instigate you to diversify your risk instead of putting all your eggs in the same basket. For example, If you want to invest £20,000, you could consider creating a portfolio of multiple stocks instead of buying Renault stock only. Portfolio diversification helps you hedge your losses and keeps you stay profitable overall.

5. Decide on a Goal for Your Investment

Take plenty of time to decide the prime reason for your investment. For example, if you plan to save for your retirement, you might need to hold your investment for a long period. Doing so can help you receive perpetual dividend payments and maximise your capital over time.

Renault has been struggling with a lousy reputation in terms of reliability for years. However, things seem to have changed now as more people are interested in buying its vehicles. Sales statistics show that the company has improved its reliability constraints, and consumers have started trusting the brand as the company recorded increased sales during the first half of 2021. By introducing a range of new models in the upcoming years, the company seems to have a robust strategic plan for growth. Hence, making it a part of your investment portfolio could be a great choice. 

If you feel an urge of buying a stake in Renault, the procedure is simple. Open an account with your favourite broker and place a trade.

However, if you're still unsure whether the stock can be a good fit for your investment portfolio, take your time. Keep doing research on the company and the investment process. You can also check out a lot of education material on our website to increase your knowledge about investing in hundreds of stocks.