The company has been performing well and its market share only keeps increasing. Below, we’ll talk about why you should buy this stock, and how you can do so.
How to Buy Woolworths Shares
To invest in the company, you will need to work with an online broker. For newbies, an online broker is a platform that lets you buy and sell assets.
Shares are the most popular, however there are many other types of assets available as well. The broker you choose should be connected to the Australian Securities Exchange.
You will need to be mindful of the broker you choose – they should be heavily authorized.
As an Australian, you need to look for a platform that is verified by the Australian Securities and Investment Commission. Most brokers for Aussies also work in New Zealand. Kiwis should look for a name that’s also verified by the New Zealand Securities and Investment Commissions.
These aren’t the only factors you need to consider. Find out how user-friendly the site is. Many of the sites available have been created with newbies in mind, and offer education centers. As you can imagine, some offer extensive resources while others do not.
The broker you’re interested in should also offer news alerts and trends. You’ll be updated on how the market is doing, and be able to invest in Woolworths when it’s the right time.
Once you’ve found a broker you like, here’s what you need to do:
- Create an account. It won’t be the same as opening one on any other site. You’ll need to include your bank details, and identity verification like your passport and bills.
- Your account needs to be funded. Different brokers require you to make minimum deposits. Some of them don’t require anything. You’ll be able to fill your account through bank transfer, PayPal and credit or debit card.
- By merely typing in Woolworths, you might not come across the company’s shares. You might have to include its ticker symbol, WOW.
- You can buy the stocks now or later. This depends on how much market research you have done. Investing in the chain now would be a market order, and buying it later would be a limit order. This is why following news and trends can come in handy.
- With the WOW stock under your belt, it’s not over. You need to track how the brand does to know if you’ve made money or not.
Where To Buy Woolworths Shares in Australia
You might be wondering whether online brokers are the only way you can invest in the company. Right now, the answer is yes. However, this isn’t a bad deal. There are a plethora of different names you can work with, each of which offers some great perks. So you can pick wisely.
They can work on all sorts of operating systems such as Android, IOS, iPad, Windows, and Mac.
Alternatives to the broker mentioned above are: Pepperstone, HFtrading or IG.
Why Buy Woolworths Shares?
If you’re thinking of buying WOW stocks, you’re making the right move. Let’s look at why this is below.
A Large Market Share
The company is the largest retail chain in Australia. It has over 100,000 team members currently, and there are 995 stores across the country. The group’s market share was a whopping 32.4% in March 2020. One of Woolworths’s biggest competitors, Coles is behind at 27.6%.
Since it’s a leading name in the game, you don’t have to worry about investing your money in the company.
Diverse Cash Means
The retail giant has been smart with how it generates cash. Purchasing the majority of the Australian Hospitality & Leisure Group’s shares was a smart move on its part. The hotel industry is a stable one, just like banking and insurance. The company makes over a billion Australian dollars from its poker machines yearly.
This doesn’t mean that it wasn’t affected by the COVID-19 pandemic, though. The Hospitality group made a 21.5% loss in 2020 compared to previous years.
Growth in Revenue
Throughout the years, Woolworths has had stable growth in revenue. By the end of 2020’s first quarter, the chain saw a whopping 10.7% increase in profits. It rose from A$14.9 billion in 2019’s final quarter to A$16.5 billion. This is when you take into account all of Woolworths’s ventures, of course. However, its Supermarkets alone grew by 11.3%.
With the Covid pandemic forcing the world to go into lockdown, its hotel business brought down the total revenue made in 2020. AUD 1.31 billion is said to have been lost because of this. However, the corporation grew by 5.9% overall compared to 2020, according to Goldman Sachs. All the heavy lifting was done by the Woolies retail chains.
E-commerce has also helped the store increase its earnings. Sales from the site went up by 86.7%, generating 1.5 billion Australian dollars alone.
With the vaccine on the way, Woolworths stocks are an attractive prospect. More people will be hitting the hotels to play poker once the world returns to normalcy.
Woolworths Competitors
With the largest market share in Australia, and being a leading name in New Zealand, Woolies is here to stay. But some of its alternatives might be a better choice to invest in. We’ve talked about three of them below.
Coles
Woolies biggest competitor is probably Coles. As mentioned earlier, it has a 27.6% market share. Like its counterpart, Coles is a company that trades various goods. It has a presence in New Zealand as well, and you can find it on the ASX under COL.
The retail chain also has a long and impressive history, being founded in 1914.
Coles has 807 stores in the country. This number not only includes its stores, but those acquired from Bi-Lo that were rebranded. The retail chain boasts over a 100,000 employees.
The company gives Woolies a run for its money as its prices tend to be more affordable than the latter. It can be argued that the company offers a superior delivery system too.
With the 2020 fiscal year results being released, it is notable that Coles has seen an increase in revenue. The sum rose to A$37.4 million, across all of its ventures. It was an overall 6.9% jump.
The group owns an independent liquor segment which saw a rapid increase in revenue across 2020. By the fourth quarter, sales were up by 20.3% compared to the previous year.
Let’s take a look at how its supermarkets compare to Woolworths. The retail store’s EBIT was up by 10.7% compared to 2019, at A$1310 million.
One of the main reasons liquor and retail segments did well was because of online shopping. The retail chain reported that the number of people that used its site jumped by 40.3% in 2020, and 70% in 2020’s Q4 alone.
We would include Kmart as one of the Woolies’ competitors below. However, the stores in Australia are subsidiaries of the Coles group.
Lidl
Lidl is a multinational German brand with several Lidl stores in Europe. In terms of the number of stores the company owns worldwide, there are 10,000 across Europe and the United States.
The chain is run by the Schwarz Group which also owns Kaufland. What’s impressive about the group is that it regularly makes it onto the world’s largest retailers list. In Forbes’ 2019 list, it came in third, mostly due to Lidl’s success.
Aidl is its biggest competitor. It has stores in Australia, unlike its rival. It is also German in origin. There were plans for Lidl to enter the Australian market but they weren’t able to come through.
The company isn’t on the ASX. However, you can still invest in it through brokers that offer global shares. You might want to do so as its major global presence makes it a force to be reckoned with – it’s not going anywhere.
Costo
Similar to Lidl, Costo is not Australian in origin. However, the company owns multiple stores down under. The number of outlets in Australia doesn’t compare to Woolies, though. There are 12 currently in the country, a number which is overshadowed by over 900 Woolworths outlets.
We had to include Costo on this list as it is a major multinational. As of now, there are 785 stores run by them worldwide. 546 can be found in the United States with the rest being spread across countries in Asia and Europe.
In 2015, it was the world’s second-largest retailer. Its direct competitor is Walmart, the world’s largest retail brand.
Investing in the chain is possible through online brokers. The Fortune 500, which ranks the US’ largest names by revenue, placed Costo on their number 14 spot in their 2019 list.
The giant was founded in 1976. The company’s achievements since then have certainly been impressive.
Even with the global pandemic affecting most businesses, the chain’s sales have been good. It made USD 166,761 million in 2020. In the previous year, it was USD 152,703 million.
Should You Buy Woolworths Shares?
Considering the above points, it’s clear that investing in the brand is beneficial. Now is a good time to do so, due to COVID-19. More people are stuck at home, stocking up on groceries.
The company keeps improving its delivery and online services, so the revenue generated through online sales is only going to get better.
The fact that Woolies commands the largest market share in the country is an incentive to invest in it as well.
Final Thoughts
All in all, investing in the retail chain can be really profitable. It’s a giant in Australia and New Zealand, with plans of expanding even further. The company was smart with its Covid-19 strategy, reaping many benefits. Investing in is easy thanks to the many brokers available online. Look at the market thoroughly before you buy stock, though. You need to be as well-informed as possible.
We looked at three competitors that might be better alternatives. From these, Costo is one of the best options. It has a presence in Australia but is certainly overshadowed by Woolworths. However, it’s a major global multinational that frequently makes the world’s top retail chains list. In fact, Costo directly competes with Walmart, which is the leading name in the retail world.
You can invest in Costo on any broker that’s available in the country, so don’t hesitate to take the leap.
