How to buy Google shares?

Alphabet Inc., the holding company of Google – and several significant subsidiaries besides – is also represented by the ticker symbols representing Google shares on both the DAX 30 in Frankfurt and NASDAQ. So now's a good time as any to buy Google shares.

Tidbits of Google history

Google was established by Larry Page and Sergey Brin in 1998. The pair thought of this when they were working on a solution to find a superior search engine to what was at hand at the time. Consequently, Google was developed as Brin and Page set to create a search algorithm that would outperform its peers.

The most famous and important algorithm used by Google is called PageRank, and, as well as still being in use, it handed the foundation for Google to become the search engine that it is today.

Google inaugurated its initial public offering(IPO) on 19 August 2004, in which 19,605,502 shares were issued at $85 per share. Credit Suisse and Morgan Stanley were process underwriters, and the IPO raised $1.67 billion – which resulted in Google's market capitalisation increasing to $23 + billion.

This augmentation enabled Google to start looking at acquiring other companies to elevate its growth. Arguably the most famous acquisition was YouTube, which Google bought in October 2006 for $1.65 billion in Google stock. Not to be outdone, Morgan Stanley has put a $160 billion valuation on YouTube.

In October 2015, Google became the most notable subsidiary of Alphabet Inc, set up by Page and Brin to make Google more streamlined and answerable. Other companies and products – apart from Google – incorporated under Alphabet are Google Maps, Google Chrome, Android, YouTube.

Google shares: the rudiments

As part of its IPO, under the ticker, GOOG Google was listed on the NASDAQ exchange. On the Frankfurt Stock Exchange, Google shares are represented by the ticker GGQ1. Today, Alphabet still trades under the GOOG ticker for class C shares and the GOOGL ticker for class A. Its brand recognition essentially drives Alphabet's share price. Google is today ranked as the second most valuable brand in the world at $167.7 billion –Apple is at the premier position with a $205.5 billion brand value.

Furthermore, the price of Alphabet shares is also driven by the continual growth of the technology sector. Many traders consider the online world a pivotal shot to watch in the near future, with likely innovations such as artificial intelligence (AI) forecasted to sweep the world up its feet.

An instance of this would be that Google bought DeepMind – a UK-based AI company – for a reported $400 million back in 2014. DeepMind is now part of the Alphabet umbrella, which admits that the technology sector will expand into these areas in the foreseeable future.

How to buy Google shares?

There are not a few ways that you can get exposure to Google shares. If you wanted the shares' ownership outright, you would invest in them via a share dealing service. Conversely, if you wanted to trade without ever owning any shares, you could trade on Google price movements by taking a financial derivative position.

Invest in Alphabet shares

You can invest in Alphabet shares with ROinvesting's share dealing service. By investing in Alphabet shares, you will own them outright, meaning you will have to pay their total value upfront. However, by holding shares, you can profit through dividend payments or sell them if the market price of the shares themselves increases.

To start investing in Alphabet shares with ROinvesting, follow these five simple steps:

1. Open a share dealing account: it only takes a couple of minutes to open an investing account. Log in: once you log in to your ROinvesting account, head to your Roinvesting dashboard

2. Fund your account: deposit some funds ere you start investing

3. Find Alphabet shares: when you've opened, logged in and funded your account, you'll be ready to buy Google shares. Opening the platform for your share dealing account, you may go to the 'finder' panel on the platform and type in and select 'Google.'

4. Choose how to buy: You'll see two tabs labelled 'at at quote' and 'on exchange' on the deal ticket. A quote is ROinvesting best price from a range of market makers. On-exchange implies you are interacting directly with the order book of the pertinent exchange.

Google fundamental analysis

Before choosing to buy or sell Google shares, it is vital to make a fundamental analysis assessment to evaluate whether they are nowadays undervalued or overvalued. Once you have made your assessment, you can determine which position you would prefer to open.

Traders carry out fundamental analysis by evaluating a company's financial records, including its profit and loss statement. However, the fundamental analysis also relies on external factors that could impact a market's value, such as shifting to alternative search engines over Google. Similarly, any changes in senior leadership at Google - or Alphabet - could affect Google's share price.

Google's price-to-earnings ratio

The value of Alphabet stock can be evaluated by looking at its price-to-earnings (P/E) ratio. In the main, a P/E ratio sets forth how much you would have to spend on Google shares to make a $1 profit. As a result, investors may begin to speculate that company stock is overvalued if a company has a high P/E ratio relative to its direct competitors.

To calculate the P/E ratio, divide the market value/share by the earnings/share. The earnings per share are calculated by dividing the total company profit by the number of shares it has issued. At June 2019-start, Alphabet's P/E ratio was estimated to be in the 25-26 range.

Google relative dividend yield

Dividend yield likened the company's annual dividends to its share price. The relative dividend yield is the dividend yield of a company's stock relative to that of the entire index. In Google/Alphabet's case, this would be DAX 30(and NASDAQ). Nonetheless, Alphabet – does not currently issue dividends to its investors, notwithstanding criticism.

Generally, to calculate relative dividend yield, you would first calculate the company's dividend yield by dividing its annual dividend by the current share price. Further, divide the dividend yield by the average dividend yield for DAX 30. If the outcome of this equation is relatively low, it could suggest that the company's shares are currently overvalued relative to competitors' shares.

Google's return on equity (ROE)

Return on equity (ROE) calibrates a company's return on shareholder capital. ROE is thought of as a percentage – 16.39% for Alphabet at June 2019-start – and it can be arrived at by dividing a company's net income by the total amount of stakeholder equity.

A low ROE implied that a company's stock is overvalued since it would mean that it is not generating sufficient income compared to the amount of shareholder investment. Thus, even as the figure of 16.39% may seem low, it must b borne in mind that some companies have a negative ROE.

Conclusion

We cannot gainsay that Google shares are profitable. Even the most cursory survey impresses upon us with the importance this stock has assumed in the trading world. BesidesROinvesting, Capixal and ETFinanace are great guides to help you navigate these rapids!